eBay avoided £ 50m in tax
Starbucks paid less than 1% tax on its profit IKEA halved its tax bill Former Italian Prime Minister Bersculoni List goes on….
How do they do it?
Special Purpose Entities (SPEs)
Sister Company Round Tripping Tax havens Influencing audit committees
Who is affected?
Less of taxes Profits siphoned off to other countries Fiscal deficit
Less spending from govt., less benefits!
Opinion too varied and depends on the culture Greece has a major tax evasion problem In India, Tax evasion is rampant Specialized persons or firms guide on tax avoidance
Another way is bribing the Income Tax officials
The problem is more prevalent among the self
Even doctors, chartered accountants or property
valuators, ,builders , chartered engineer ,cine artists , tax consultants, stock brokers do tax evasion
Reason for Tax evasion is lack of trust in government Results into black money which causes illegal activities
“Where there is business ethic, there is a long-term
Is there a company that can get success without ethics? From the facts, the answer seems to be “NO” Whether Enron or Anderson or our own “Satyam”, they all finally paid for their Unethical Practices. Arthur Anderson the one-time Big 5 accounting firm went entirely out of business, affecting 22,000 workers, most of whom had no connection to Enron.
Fiercer statutory regulation of the auditing profession Mandatory rotation of audit firms so that individuals
do not become too committed to their clients
Stronger non-executive directors who can work as a check
against malpractices by powerful CEOs
The Government should levy a minimum tax on annual
revenue earned by a Company
Reputation management and competitive advantage Enhanced social license to operate Employee satisfaction