Money, Money Everywhere- Not a Dollar to Tax

The law of the land is more often than not decades old. Many laws have been rewritten to accommodate the changing stride of the world like the laws pertaining to same sex marriage and individual privacy. One segment of laws that has not yet gotten a makeover is corporate taxation. From time immemorial, companies have been taxed based on their physical presence. In today’s globalized and digital world, that is an outdated concept.

Multinational corporations make a lot of money, a lot. A look at some of the revenue figures of top tech companies in 2020*:

• Amazon: $386 billion 
• Apple: $274 billion
• Facebook: $86 billion
• Google: $182 billion

Notwithstanding, they make use of an army of lawyers and ever present loopholes (call them provisions? Concessions?) in countries’ tax structures to take home as many dollars as possible, duly circumventing what is owed to the governments. Alas, we cannot blame the corporates entirely either, the demands of capitalism bear on their shoulders.

Negotiations and discussions to better tax mammoth corporates that shelter the bulk of their revenues in tax havens, have been going on for long. This movement has been granted a small victory recently. The G7, which is a grouping of the world’s wealthiest nations, have agreed on a broad basis for taxing companies that operate beyond the territorial limitations of their home countries. The need for a basic minimum tax rate has been recognized and a framework to distribute the taxes among market countries have been put up. Make no mistake, none of this is law yet, which still has a long road ahead. But this is a welcome step to ensure fair taxation across the globe.

I saw a post on Instagram that calls for a world where there are no billionaires. Every penny earned beyond 999 million is siphoned off for public good and an award is presented to the individual. A radical would agree this is radical, but why not? 😀

Allow me to sign off with a glaring irony among this hubbub, an individual in India who earns over 15 lakhs per annum is subject to an income tax rate of 30% (based on the latest tax regime) while the proposed minimum tax rates for MNCs, that see thousands of crores of profit, is half of that- 15%. 👀👀

 

*Source: Statista.com