Mr. George Osborne, the UK chancellor of Exchequer has put greater effort in the collection of unpaid tax and dealing with tax avoidance. As a result of this Starbucks Corporation (NASDAQ:SBUX) the world’s biggest coffee shop operator has agreed to pay more tax in Britain after being reprimanded by the lawmakers for being involved in tax evasion.
Mr. Osborne is now putting more money and effort in the project to handle those who are evading tax. For these 77 million pounds has been spent on improving Her majesty’s Government revenue and customs’ technology and to strengthen its staff, which resulted it in getting an extra 2 billion pounds unpaid tax recovery from Starbucks Corporation (NASDAQ:SBUX).
According to the 13th November hearing in parliamentary hearings, Starbucks Corporation (NASDAQ: SBUX), Amazon.com, Inc. (NASDAQ: AMZN) and Google Inc (NASDAQ:GOOG) were accused of using multifaceted accounting standards to misrepresent the annual income in order to minimize the tax liability. Osborne expects a 10 billion pound collection of unpaid tax by December and hopefully he would reduce a tax liability of 1 billion pounds for the bureaucracy surroundings as carbon reduction commitment.
In order to reduce the fiscal deficit, Osborne has to appease lawmakers by making the system strong enough for the recovery of unpaid tax as well as for implementation of a new structure plan of rule for reduction tax avoidance.
Some of the UK companies are involved in transferring their funds to some tax havens in order to minimize tax liability.
Osborne has not failed to notice that some of the UK individuals have money in Swiss bank accounts to evade taxes. Thus he has plans to collect a as much as 5 billion pounds by implementation of the stricter system.
Every citizen who is liable for tax payment should pay tax, irrespective of whether it’s a company or he is an individual.
When someone evades tax in this case, then the individuals or companies paying proper tax feels the pinch, which is why the lawmakers think that stricter steps should be taken to handle this issue which will not only contribute to reduce the fiscal deficit but also help the economic environment of the nation.
According to the public accounts committee the government should be more aggressive and assertive in overcoming this problem.
Margaret Hodge, the opposition labours party lawmaker termed the tax avoidance issue as an insult to the people who pay the taxes properly.
However as per Starbucks Corporation (NASDAQ:SBUX), it is committed to the law of the country and will generate a report basing upon the discussions with the authorities.
Need to do more
Starbucks Corporation (NASDAQ:SBUX) evaded tax on revenue of 1.2 million pounds generated since last 3 years and misrepresented it as a loss to the company by doing some intra transfer of funds.
The company evaded a corporate tax bill of 5 million pounds by paying royalty fees of 4.7% of its Dutch division so as to use their patented rights.
Last year Google Inc (NASDAQ:GOOG) paid 6 million pounds as tax.
Amazon.com, Inc. (NASDAQ:AMZN) was a laughing stock among the committee members of the testimony, a month earlier, about how a profit of $25 million it has made by sales amounting to 9.1 billion Euros across Europe.
The share price of Starbucks Corporation (NASDAQ:SBUX) was down by 0.16% to close at $51.78.
The share price of Amazon.com, Inc. (NASDAQ:AMZN) was down by 0.68% to close at $250.32.
The share price of Google Inc (NASDAQ:GOOG) was down by 0.45% to close at $695.25.