Tax Evasion and Ethics
Who did it?
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?
Government
Less of taxes
Profits siphoned off to other countries
Fiscal deficit
General public
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
employed
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
bloom”.
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
Risk
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?
Government
Less of taxes
Profits siphoned off to other countries
Fiscal deficit
General public
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
employed
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
bloom”.
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
Risk