Big tech, tax and consumer attitudes

Prior to the G7 talks last month, a treasury source said that any global deal on a minimum corporate tax rate must ensure that large tech companies pay their fair share of tax. "That is what our taxpayers would expect and is the right thing for our public services" they added.

Our recent data supports this as UK consumers are more ethically-conscious than ever. For the end of 2019, ethical consumer spending and finance in the UK reached record levels at some £98bn, with consumers indicating this is increasing as we progress through the pandemic. 

Consumer will to spend ethically extends to supporting businesses with sound tax practices, too. New polling data commissioned by the Fair Tax Foundation earlier this month found that almost three quarters of the public (72 per cent) think it’s important to celebrate businesses who “can demonstrate that they pay the right amount of tax and who overtly shun the artificial use of tax havens and contrived tax avoidance practices.” Two thirds of the public would rather shop with (66 per cent) or work for (68 per cent) a business that can prove it is paying its fair share of tax.

Big Tech tax avoidance hasn’t gone unnoticed by business. Last month, more than 70 business leaders, the majority of which are UK entrepreneurs, called on the government to back the “once-in-a-generation” deal, writing “businesses should succeed not because they cut corners or avoid paying their fair share of tax, but because they build fantastic teams and products.” 

Campaigners have also been keeping a close eye on things. The Fair Tax Foundation released data earlier this month that suggests there is a gap of $149.4bn between the expected headline rates of tax and the cash actually paid by the Silicon Six over the period 2011 to 2020.  

The evidence points to a global appetite for accountability on tax practices. So, why is Big Tech choosing to buck this trend?

Digital multinationals often take steps to convince society they exist for good. While in the past, a company’s PR strategy could go some way to shaping the news agenda, times have changed. Organised campaigning from increased public awareness and scrutiny makes this an impossible road to travel for any truly responsibly-minded business. Whether former employees, activists, entrepreneurs, think tanks or politicians, the real world impact of employment rights, tax practices and environmental impact will always bubble to the surface.

Consumer pressure brings changes

Consumers are looking for reassurance that Big Tech is playing its part in providing solutions for the challenges that the interconnected world currently faces.

The conclusions from the recent international talks are a step in the right direction. A minimum global tax rate, even of at least 15 per cent, is a victory for campaigners against tax avoidance by multinational corporations. But it shouldn't take global legislation and endless negotiations to force companies to pay their way.

Consumers and businesses still have a choice. While the hackneyed “build back better” hangs in the balance, the collective mainstreaming of ethical spending is here to stay.

Big Tech may not take the initiative, but in our new world there is a very clear opportunity for new kinds of business thinkers to set the precedent on leaving a responsible and fair legacy.