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Government must set better tax rules for multinationals.

August 13, 2018 10:21 PM

MoneyThe news that Amazon has doubled its profits made in the UK while reducing its tax bill has been greeted with outrage by some.

But in reality, because both Labour and Tory governments have ducked tax modernisation, it seems that the company has paid all the taxes demanded of it.

What the case highlights is that the tax system hasn't kept up with changes in the global business environment and new technology, and smart global profit earners.

Increasingly, cross border co-operation between Governments is necessary to ensure that businesses pay their "fair share" in the countries where they make their money from those citizens.

Top and bottom, it's up to Governments to set tax regimes which are fair and reasonable, which are not easily evaded, and which don't have other, greater, negative consequences.

Companies domiciled in the USA and US citizens pay tax on their global profits or earnings wherever they are made. Why not other nations?

In the past, Liberal Democrats have suggested that there should be a minimum rate at which tax should be paid on all profits before special allowances are taken into account (one of the reasons Amazon was able to keep its tax bill low).

As more and more business is done on-line, another look must be taken at internet-based sales taxes and some sort of charge which levels the playing field between shops and factories who pay business rates and those whose main activities have no or little physical presence.

If such companies want access to UK taxpayers to sell their goods and services, Government must ensure they make a meaningful contribution to the wellbeing of those people which is supported by tax spending.

The Liberal Democrats spokesman on business, development and employment in Newcastle is Cllr Robin Ashby