World News‎ > ‎

British PM warns companies to pay fair taxes

posted 24 Jan 2013, 05:56 by Sam Mbale   [ updated 24 Jan 2013, 05:57 ]

UK Prime Minister David Cameron - speaking at the World Economic Forum in Davos - calls for a clamp-down on tax dodging, but stresses he is "resolutely pro-business".

 DAVOSSWITZERLAND (JANUARY 24, 2013) (World Economic Forum) -  The UK's Prime Minister David Cameron turned up the pressure on Thursday (January 24) on multinational corporations that seek to lower their tax bills aggressively and promised action to limit tax avoidance strategies after a public backlash in Britain.

The issue of tax avoidance by big companies has turned toxic as millions of Britons struggle against meagre wage growth and austerity measures to reduce a budget deficit. Firms that are viewed as paying too little tax have been targeted by demonstrators and boycotts.

"I am a low-tax Conservative but I'm not a companies-should-pay-no-tax Conservative," Cameron told CEOs and investors in a speech at the World Economic Forum in Davos. "Individuals and businesses must pay their fair share."

Cameron did not mention any companies by name in the speech. At the height of the uproar last year, British lawmakers singled out Google, Amazon and Starbucks as companies that pay very little tax in Britain on profit from sales there. Executives from the three were summoned to testify before parliament and explain their operations.

The firms say they comply with British tax law, but under a tide of public outrage and in-store demonstrations, Starbucks last year said it would pay around 20 million pounds (32 million US dollars) in corporation tax in Britain over the next two years.

"Any businesses who think that they can carry on dodging that fair share or that they can keep on selling to the UK and setting up ever-more complex tax arrangements abroad to squeeze their tax bill right down will need to wake up and smell the coffee because the public who buy from them have had enough," Cameron said.

Cameron was quick to stress that he was not adopting an anti-business agenda, that he is "resolutely pro-business".

"I know that some people might be thinking - he's talking about cracking down on tax avoidance, talking about making companies more transparent, doesn't this sound like an anti-business, bash-the-rich, tax success agenda? Absolutely not, this is a resolutely pro-business agenda," he said.

Cameron was speaking at the second day of the World Economic Forum, with his Chancellor George Osborne to take the stage later in the day.