Jiva Technology

It’s time for tech companies to stop playing games with tax

I have a simple request for Google, Apple, Amazon and all the other big technology companies that are engaging in increasingly complex tax avoidance scheme in order to … well, avoid tax. It’s not big, it’s not clever and it’s giving the rest of us a bad name.

Technology companies have historically enjoyed a good reputation and with good reason: they created exciting new products, good jobs and were generally socially responsible. This seems to have changed and a new attitude seems to have taken hold, one where companies are bigger than the governments or the communities they are part of (or not). This is just plain dumb and here are two (of the many reasons why):

  • small technology companies rely on favourable tax environments and incentives to get off the ground. To name but three in the UK: R&D tax credits, EIS and SEIS schemes and the patent box scheme. Getting the industry a bad name does nothing for public support of these schemes and makes it more likely that they will be scaled back or withdrawn.
  • Pretty much everyone’s business in the tech sector relies upon a technology that was patiently supported and developed using Government money over many years. It simply never would have happened without Government support. That technology? The Internet. Paying taxes just pays back a small portion of that investment that we, as taxpayers, made over many years.

So whilst I hold out little hope that Amazon et al will listen, I am hopeful that public opinion will make a difference. Because our products are mainly based on intellectual property, it’s easy to shift profits around the world and engage in the sort of tax arbitrage to make an investment banker proud. But that doesn’t make it right and it’s not something that we, as an industry, should contemplate.

 

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