Public Accounting Committee to Grill KPMG, Deloitte, PwC and Ernst & Young on Tax Avoidance Issue
The PAC will now be grilling the leading accountancy organizations, also known as ‘Big Four’ for the role played by them in the existing tax avoiding/planning issue, which has a put a number of MNCs including Amazon, Google and Starbucks into problems as well.
The Public Accounts Committee’s chairman Margaret Hodge shared over a news programme that they want the 4 accountancy organizations to ensure that at the time of advising the clients, they do not advise on ways to engaging in aggressive tax avoiding schemes.
There has been a lot of debate on how MNCs operating in the United Kingdom (many of which had received advices from the leading accountancy organizations) are enjoying a unique competitive advantage as opposed to their United Kingdom based competitors, using the low tax options legally.
Hodge stated that the companies that aren’t adopting a tough mode on the matter shouldn’t be given attractive contracts that are related to governmental outsourcing.
Hodge stated that if they want to bring about a change in the culture within the United Kingdom, then they will have to take an action right now. She also stated that the leading four accountancy organizations are acquiring more governmental business since this particular government is choosing to outsource a number of back-office related activities.
On the other hand, PricehousewaterCooper’s head of tax policy, Monfries spoke in defense of the taxation planning role played by the firm. He stated that they assist entities when they view tax in the form of a cost. However, they have some very clear and crisp principles regarding the manner in which they work. He also clarified that any tax related advice that is offered by them is supported by and based on law.
A current research conducted by the Tax Justice Network revealed that the leading four accountancy organizations (including PwC, Ernst & Young, Deloitte and KPMG) have more than two hundred offices across world’s forty five low tax areas including Liechtenstein, Cayman Islands and Bermuda.
Recently Starbucks succumbed in view of pressure from the public and made announcements stating that it would pay additional ten million pounds annually in the form of corporation tax in the United Kingdom, till the time they are able to generate profits.