DAVOS: British Prime Minister David Cameron warned Thursday that corporations must "pay their fair share" of taxes and said he would use Britain's G8 chairmanship to counter tax avoidance.
Speaking at the World Economic Forum in Davos, Cameron said too many global businesses were abusing tax schemes, after Britain last year announced a crackdown on multinationals such as Starbucks, Google and Amazon, claiming they are avoiding huge tax bills.
"When some businesses aren't seen to pay their taxes, that is corrosive to public trust," Cameron said in a speech to the global political and business elite.
"We want to use the G8 to drive a more serious debate on tax evasion and avoidance. This is an issue whose time has come," he said.
He said Britain would use its chairmanship this year of the Group of Eight rich nations to push for cross-border action on tax avoidance.
"Clamp down in one country and the travelling caravan of lawyers, accountants and financial gurus just moves on elsewhere. So we need to act together at the G8," Cameron said.
He insisted such moves were not anti-business.
"I believe in low taxes... I'm a low-tax Conservative. But I'm not a companies-should-pay-no-tax Conservative," Cameron said. "Individuals and businesses must pay their fair share."
Britain last month announced a campaign against "tax dodgers" and "cowboy advisers" to claw back £2 billion a year, after lawmakers alleged that multinationals were involved in "immoral" avoidance of tax.
German Chancellor Angela Merkel stressed that tax evasion and fraud was also an "enormously important issue" for the Group of 20 major economies.
"Every financial instrument, every financial product, every financial market, needs to be placed under regulation," said the chancellor.
"We are very far from that and I can only call on the financial industry to support us on this because another bubble that we create would bring another crisis for the global economy, which would be very difficult to overcome," she added.
Taxand, the world's largest independent global organisation of specialist tax advisors to multinational businesses, hit back saying that harmonisation of rules was not necessarily the best solution to tax fraud.
Multinationals should enter into talks with the relevant tax authorities "to obtain prior agreements for a particular initiative or investment," said Frederic Donnedieu de Vabres, the group's chairman.
"It is this, as opposed to a pursuit of harmonisation, that perhaps poses the best way forward," he added.
- AFP/jc
Cameron warns companies must 'pay fair share' of taxes
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Cameron warns companies must 'pay fair share' of taxes
