Our new tax campaign will encourage the government to consider a windfall tax on ‘Big Tech’ companies to help cover the social costs of the pandemic’s impact.
Windfall tax campaign for big technology companies
In 2020, three months into the COVID 19 lockdown, we started a new tax campaign.
In our new tax campaign we are asking:
• To increase digital sales taxes to 10% as a post-COVID emergency action until such time as an agreement on curbing tax avoidance is reached internationally.
• To wind down all tax avoidance schemes and begin to make reasonable contributions to the post-COVID societies in which they operate. We also ask them not to contribute to industry groups lobbying to prevent ethical tax reforms and interventions.
• To write to your political representatives asking them to increase digital sales taxes as described above.
• To contact tech companies asking them to publicly justify continued use of tax avoidance schemes in a post- COVID world.
• To use Ethical Consumer product guides (especially our technology guides) to avoid participating, as much as is practical, with the products of the worst big tech tax avoiders until they improve what they are doing.
Why are we doing this?
The financial cost of tackling the coronavirus crisis in the UK alone will be enormous – somewhere in the region of £300 billion or more. At the same time, profit-shifting to tax havens is costing the UK something like £7 billion per annum in lost corporation taxes. This is the equivalent of a year's pay for around 180,000 nurses.
Some of the most high-profile avoiders of corporation tax are Silicon Valley mega-corporations such as Facebook and Google. The same companies are also turning out to be some of the biggest winners from the COVID-19 pandemic.
We think that most people will find it particularly jarring that some of the companies who have most egregiously failed to pay their way while cuts have depleted NHS capacity, are now raking it in while society buckles under the worst public health crisis for a generation.
It therefore makes sense to start talking about how they might make a fairer contribution to the public services on which they, just like the rest of us, rely.
There are two main pieces of research that sit behind this campaign.
In this article, where we first talked about this campaign, we try to estimate the size of tax avoidance by the tech companies and explore how to make the case for intervention.
In this article we look in detail at the mechanism of the Digital Services Tax and how in needs to be improved to properly capture the lost revenue from tax avoidance.