Tax: Don’t Blame Amazon: Update The Tax Model!

There is an understandable outcry about the very modest corporation tax paid by Amazon in the UK. Yet as the company points out, it has complied with all rules and laws and paid exactly what is properly due.

Charging tax according to events, especially profit, is utterly archaic and belongs to the world of sailing ships and telegrams. In the modern digital world, which recognizes no frontiers and few restraints,  the only way to tax business is by turnover. A much smaller percentage on a much larger number paid monthly no matter what. No avoidance possible,  the mere attempt a crime requiring mandatory prison for the perpetrators, loss of practicing licences for the auditors and crippling fines for the directors who let it happen.

The location of the company HQ, its tax domicile and every other device now employed to funnel funds through tax havens would be void. Whatever turnover occurred, including imports and exports from other jurisdictions, would be taxed. In other words whenever money changes hands there is a tax. Small businesses would enjoy a tax free threshold of say £100,000 and the self employed would pay p.a.y.e on their drawings from their business or on their incoming fees and commissions.

But to do this requires initiative and planning, as well as organising ability, and the setting up of systems. All of which appears to be utterly beyond the capacity of this government. It may be also to do with the civil servants in Whitehall. But whatever the difficulty sooner or later this will have to be done.