Profitable companies should pay their share of tax and should not be allowed to avoid tax. To hold ethics and integrity, lawyers and accountants should not use their professional knowledge to help profitable companies to avoid tax, for the sake of earning large fees. This is immoral. Countries and states should not have laws that allow companies to avoid tax (and my statement applies to Singapore as well).
http://www.cnbc.com//id/47218258
http://www.cnbc.com//id/47218258
In s'pore we have legalised regime to minimise taxes for companies. Active encouragement of companies to minimise their taxes via tax holidays, subsidies and rebates by agencies such as MTI and EDB. Some units of MNCs here pay $0 tax for 2-3 years even though they earn hundreds of millions. Such structure can jack up GDP, but doesn't meaningfully benefit the typical citizen.
ReplyDeleteTax avoidance is perfectly legal and professional. That's why there're accountants and tax lawyers hired to arrange minimization and avoidance of tax for companies and high net-worths.
ReplyDeleteFor example, if I earn $1 million and simply fill in $1 million on my tax returns, I may be be liable for $250,0000 tax. Like, set up a trust fund, research fund, endowment fund as allow in the tax code, I may only be taxed $50,000.
Tax evasion is illegal. It means that I under-report or don't report or hide my source of income.
Hi:
ReplyDeleteI actually agree with this sentiment. Just because something is legal to do, does not make it right. I would like to point out the follwoing article from Fortune Magazine on Apple: http://tech.fortune.cnn.com/2012/04/29/apples-tax-strategies-double-irish-with-a-dutch-sandwich/ -- Talk about a convoluted strategy of tax avoidance! I understand it is perfectly legal, but I still find this off putting and frankly speaking it lowers my opinion of AAPL as a corporation. Of course, I suppose one could also argue that the US corporate tax code is so complex and convoluted - especially in regards to international profits - that it encourages this kind of behavior. Indeed, all large corporations use these tricks. GE also got quite negative publicity on this a few months back, one year they made huge profits and literally paid no taxes. I think its a combination of a great need to simplify the tax code, and for corporations to feel at least a bit more sense of social responsibility. And for the record, I am very pro free market!
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Government is neither stupid nor generous to leave loopholes open. There's an economic purpose. It opens up legal, accountancy, banking and investment works which in turn will generate productivity and income taxes on their own too.
ReplyDeleteBetter than government just taxing everything and clueless as to what to do with the money and waste it.
I find this a peculiar mentality among Singaporeans that what many describe as Sinkies. When government taxes you, you scream robbery! When others arrange their financial affairs to minimize taxes, you scream immoral!