“This agreement is a further step towards more openness and better cooperation, facilitating fairer and more effective taxation throughout the EU.”
With those words, Pierre Moscovici, the commissioner responsible for financial affairs and taxation declared Europe as a ‘hallmark’ of financial transparency and openness.
Last March, the member states of the EU reached an agreement to create a more transparent environment for tax advisers, accountants and other financial workers and services. Amongst a context that saw leaks from the Panama papers, this agreement set a standard in how financial corruption and tax avoidance would be tackled, shining a light on those that attempted to subvert their financial responsibilities. The process would be up and running in 2020, with information being exchanged between member states from October that year.
It is imperative that the United Kingdom does not renege on this responsibility, regardless of what happens post-March 2019.
Corporation tax is a necessary evil. Whilst the drive for economic growth and profit has seen companies flourish, innovate and create jobs – those same companies are built on the foundations laid by our society.
Our schools train the workers of the future, our infrastructure allows for the smooth movement and running of day-today business activities, and our emergency services protect property and keeps workforces in good health. All of these things cost money and taxation is a fair way to pay for these ‘hidden’ expenses.
To avoid paying what is right is nothing short of theft. The EU’s transparency directive was a logical way of ensuring that there would be no hiding place for individuals or organisations not paying their fair share.
Therefore, the Liberal Democrats need to ensure that there are plans in place to ensure that these directives are not lost, regardless of what happens with Brexit.
Let’s put this in perspective: The UK has the largest number of offshore entities in Europe with around 18,000. The second largest is Luxembourg with nearly 11,000. With the UK economy predicted to fall next year – imagine the financial support available if some of these organisations paid what was fair?
Like many Lib Dems, I am determined that we will secure a vote on the deal and then convince the country that our future lies within the EU, leading it to a more prosperous and united future. However, I am also a realist – and we must be prepared in case things do not go our way.
That is why I am calling upon the party to start formulating plans on how Britain’s Transparency Directive will look and how we can ensure that those organisations, individuals and corporations pay into the system and play an active role in growing our economy.
We must work cross-party to ensure this is delivered. Moderate Conservatives, economically minded Labour thinkers and the sensible wing of the SNP will all agree we need to protect Britain from becoming a tax haven for the super-rich. They will see the disaster that looms if we allow a free ride when it comes to paying for the benefits that society gifts.
The Liberal Democrats have a positive track record on the economy, business and taxation. Let’s carry this tradition on and lead.
* Tom Morrison is the Liberal Democrat Parliamentary Spokesperson for Cheadle, community campaigner, and associate director of a specialist communications agency.
Follow @LibDemVoice on Twitter
Like us on Facebook
Subscribe to our feed
Sign-up for our daily email digest
Sausage company launches free rural bus service
Friends of Balgay event on Saturday! #dundeewestend
The "Just War" tradition
Our kids need a lorra, lorra, larffs!!
Joseph Bourke
Matthew Radmore
Roland
Mick Taylor
Katharine Pindar
5 Comments
I agree with this. At least I think I do. I am worried about the sentiment that corporation tax is a necessary evil. I can see nothing evil about it.
However we certainly have a moral obligation to do something about our financial institutions. This means that we need to look at the philosophy underlying the Companies Act. The problems caused by the out of control companies which in the end are underwritten by the public have been clear to see.
We need to look anew at the idea of limited liability. In the end it is all about people. People run large companies. People profit from them. People should be held to account.
@ Tom Morrison,
“Corporation tax is a necessary evil”
It’s just another tax like VAT. Neither evil nor otherwise. The economy and the value of money is driven by our need to pay our taxes.
“The UK has the largest number of offshore entities in Europe with around 18,000. The second largest is Luxembourg with nearly 11,000.”
The population of Luxembourg is, though, only around 1% of the UK. The rate of corporation tax in the UK is 19%. The rate of corporation tax in Luxembourg isn’t so easily stated. Just how much tax is paid, if any, is often negotiable. I think one J-C Juncker knew a thing or two about that. We do have to ask, for example, why eBay (UK) has such close links with Luxembourg? Not just for the payment of Corporation tax but VAT too?
Perhaps they don’t want to pay much tax at all? £1.1million on a £1.1 billion turnover is 0.1%. We might all settle for that! And, despite claims that Brexit is somehow connected with a desire to escape EU anti taxation evasion/avoidance measures we haven’t been able to do a thing about it under EU law.
https://www.theguardian.com/business/2016/oct/08/ebay-pays-11m-uk-tax-on-revenues-it-told-us-investors-were-11bn
I see a parallel here between taxes and immigration. I agree the priority is for laws to be obeyed whether it is illegal immigration or tax evasion. When we were a prosperous country perhaps it was not as important to collect every last penny or count every immigrant. Things have changed and these numbers are now important. We must invest to ensure we make the most of what we are entitled to.
I’m glad you mentioned tax avoidance because I think this has to be tightened up for individuals and corporations. The idea that you can legitimately avoid paying tax if your accountants find a loophole while at the same time people who claim benefits can be penalised for not turning up for an appointment expresses the ideology under which this country operates at present. Tax is regarded as unfair by many people, rather than their contribution to services the country needs.
This is exacerbated by the idea that “the state” is somehow a separate entity, with a life of its’ own, when in fact in a democracy it is the executive arm of the government. We Lib Dems think of society as a community which benefits when all members are given their optimum opportunity. Taxes are contributed to achieve this aim but must not be too onerous to avoid stifling the abilities of those who create wealth. We don’t try to benefit the few, but neither do we try to oppress them. We want those at the bottom of the economic heap to be given the support and opportunities they need for a better life, so inevitably those at the top of the heap will have to be taxed to achieve this. Taxation in a Lib Dem society should not be punitive but it should be fair.
@Peter Hirst
“When we were a prosperous country perhaps it was not as important to collect every last penny”
I don’t think we are talking about “every last penny” are we? – we are talking about a group of very wealthy people and global organisations who appear to be avoiding significant amounts of tax through offshore chicanery – shifting business costs to high-tax countries and declaring profits in low-tax ones irrespective of where the profit is really earned.