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December 8, 2012 / trajsingh

Wake up and smell the hypocrisy

So Starbucks will be paying a ‘voluntary’ £20 million in tax.

If you haven’t been following this, a huge cry of outrage has arisen in the UK because multinational corporations have only been paying the tax they are supposed to pay. Yes, you read that correctly. How dare these parasites obey the laws of the country and at the same time try to serve their shareholders by minimizing their tax bills?

A-ha, you will say, the cry of outrage is directed against the government, of course, given they are the people that put in place the rules that Starbucks, Google and others must follow. But no, that would be too logical. Instead, a journalistic frenzy has erupted against the companies themselves, resulting in this rather humiliating volte face by Starbucks.

As anyone in business should know, you must constantly attend to many things simultaneously: run your business well, (including legally), provide great products and services profitably, and maximise shareholder value. That is your job. Now, it seems, you have to rectify government policy and atone for government’s shortcomings too.

A real government would stand-up and agree to change the tax code, if that was the fiscally prudent thing to do. Instead, they sigh with relief that they aren’t the ones being bashed, and join in with a few blows of their own. I guess this is what comes of electing politicians in the first place.

For the record, if a company is operating legally, and certainly not immorally, let us leave them alone to get on with it. If you want the law to change, lobby your politicians. Oh, and by the way, the uncertainty that this will cause among all corporations operating in the UK will only be bad for business, the economy and the Chancellor’s tax take. Bad news for everyone.

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