Amazon on defensive after UK tax bill falls while revenues soar
One of the world’s biggest retail companies, Amazon, has been accused of being a tax dodger after its UK bill was slashed to a mere £7.4 million year. That’s despite its UK revenues soaring by more than 50 percent to almost £1.5 billion.
Amazon UK services reported a tax payment of £7.4 million (US$9.6 million) in 2015, down from £15.8 million the previous year. That’s despite turnover rising from £946 million to £1.46 billion.
The retail giant justifies the fall by insisting that, while revenues increased, profits have fallen from £48.5 million to £24.3 million.
Ana Arendar, Oxfam’s head of inequality, condemned big corporations for dodging tax, saying it takes away from the public.
“Despite some action by ministers and companies, widespread corporate tax avoidance continues to cost both rich and poor countries billions every year that could pay for schools and lifesaving healthcare,” she said.
“We urgently need comprehensive public country-by-country reporting for multinationals to ensure they pay their fair share of tax – the UK government should implement this by the end of 2019 – unilaterally if necessary,” she told the Guardian.
Amazon claims its expenses also contributed to the tax cut, as they rose by 60 percent to £1.4 billion, with share-based payments accounting for £36.7 million.
This in turn led to a drop in profits, and therefore taxes.
The share-grants also led to a £1.3 million tax credit, which can be deducted from the tax bill.
Critics, however, claim it is yet another instance of giant companies seeking to exploit loopholes in the UK’s tax system to avoid paying hefty sums.
“Multinational companies like Amazon exploit flaws in global tax laws and use tax havens to avoid paying their fair share,” Oxfam said, the Times reported.
Amazon dismissed accusations that it’s falling short of paying the right amount of tax.
“Corporation tax is based on profits, not revenues, and our profits have remained low, given retail is a highly-competitive, low-margin business and our continued heavy investment,” a spokesman said.
Director of Global Justice Now, Nick Dearden, hit out at the government for backing the wealthier classes, while the “poorest sections” of society pay the cost.
“There’s no legitimacy in the government saying that it can’t afford to grant minimal pay rises for nurses and other vital occupations in the public sector when it is allowing massively profitable corporations like Amazon to waltz away with the most desultory tax bills,” he told RT.
“It’s high time that we held corporations like Amazon to account and ensure that they are paying a fair share of tax in this country in the same way that millions of ordinary working people do.”
