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Companies who pay less tax make us all pay more; Dafydd Wigley Former Plaid MP writes for the Daily Post.

There are, traditionally, two things we can't avoid: death and taxation. Half is certainly true: we can only postpone, not avoid, the grim reaper.

But taxation? For rich supranational corporations, taxes are a nuisance which they have over recent decades, increasingly avoided. That makes my blood boil.

This week, thousands of people are scampering to file their self-assessment tax returns on-line, and pay what they owe for 2014-15. Accountants are burning the midnight oil to get everything delivered on time.

Farmers, shop-keepers, musicians, taxi-drivers, gardeners - even pensioners with minimal untaxed income - are liable to pay income tax.

No-one likes paying tax. We do so - grudgingly - knowing that taxation pays for our hospitals, schools, roads and pensions. Paying taxes is part of responsible citizenship.

But while individuals make their payments, many large international corporations get away with paying peanuts. They do so legally - transferring money between continents - so that their final profits are paid in countries with low corporate tax-levels.

Labour and Conservative governments have failed to remedy this disgraceful situation. Consequently the Treasury has lost substantial revenue and to maintain public services, individuals will have to pay more; or see the national debt rocketing.

So I raise two cheers that Google had to acknowledge this week that they have paid less corporation tax than appropriate for a company with multi-billion pound turnover in Britain.

But I must deny the Government a "third cheer" - because of the paltry sum on which they have settled. Google will pay PS130m in corporation tax to cover the last decade - during which time they made PS7bn in profits in Britain. The tax is barely one-tenth of what UK companies would have paid on such profit levels over that period.

Why have the Government been soft? It's partly because they fear such companies regarding Britain as a "high-tax economy", and arranging to pay their taxes elsewhere.

Only this week, HSBC executives will meet in Hong Kong to consider moving their headquarters from Britain, because they don't like the bank-levy being charged here.

Such large corporations can play one country off against another, moving funds and registered offices around the world to avoid paying taxes.

So what's the answer? The only stable long-term solution is an agreed international order which denies supra-national corporations such let-outs. But that's a distant possibility, made less likely by those who want to quit international organisations set up to control the worst excesses of free-market economies.

To my mind, the UK needs a hybrid tax structure, with a tax on turnover being applied to companies who avoid tax on profits. There were murmurs of interest when I proposed this in the Lords on Tuesday.

Such a tax would be applicable to UK businesses also; but any company - British or overseas - who pay their full corporation tax, would be automatically exempt.

It 's high time the Government took off their kid gloves and dealt with international corporations who refuse to pay their dues.

Otherwise, all of us will have to pay higher taxes - to let fat-cats avoid their responsibilities.

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Publication:Daily Post (Conwy, Wales)
Geographic Code:4EUUK
Date:Jan 28, 2016

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