Saturday, June 01, 2013
Globalisation and Technology has introduced a new breed of corporation who ‘see no evil, hear no evil and speak no evil, do no evil’, but sail very close to the wind in their approach to many moral aspects of business.
We have all heard the lengths that they go to avoid tax and ensure that they operate at maximum profit. The list of companies that play the game and operate within the tax laws but with questionable moral,s is not just restricted to the big technology companies we read about. The hall of abdication includes; Google, who have a preferred lower rate in Ireland than the Irish companies, Amazon, who have the weird situation where they earn more out of government subsidies than they pay in taxes in the UK, Apple whose tax regime is ‘complex’. There are many others, such as the ticket company, The Trailine and UK rail operator, First Great Western, which are hardly international companies, but find it good to be based in Luxemburg.
Then we have the VAT games which apply to those who operate in lower EU tax countries and sell into higher rate countries and gain the obvious windfall VAT as a result. Of course the EU are going to fix this in 2015 but that doesn’t stop 'hay being made while the sun shines' today and traditional businesses suffering a governmental penalty for paying their appropriate tax. Most of the major digital media operators look to use the Luxemburg VAT haven; Amazon, Kobo, Nook. There should be a simple windfall tax levied against this organisations and they should be made to realise that there is a moral conduct of practice even if they can skirt around the legal one.
All this is without the social network and technology services that are constantly pushing the privacy boundaries and being challenged by authorities and social rights groups when they make changes. Here we often see the old, 'act first and think later’ approach being adopted.
We also have CEOs who sit in front of being questioning and merely state they operate within the law. Its like listening to a suspect being questioned and them merely saying, ‘No Comment’ to every question. Some such as Google’s Schmidt have the bare faced arrogance to claim, that as they employ workers in a country and the workers’ pay tax then that should taken into consideration.
One of the biggest commercial challenges we face is the global corporate's ability to become untouchable. They want to reap the benefits of doing business in one country whilst paying their reduced dues in another. They want to have an unfair advantage over traditional and indigenous business who pay their taxes in the country they do business. They want to offset huge revenues to Intellectual Property companies sitting in some far off tax haven.
If politicians are to earn the consumer respect they need to tackle this plague of locust before they truly become untouchable.