Corporate taxation - a broken model?

kabayiri

It's been interesting to read the comments people have made.

It's clearly not a simple issue. It does seem clear however that there is a strong financial incentive for typically large corporations to indulge in elaborate constructs and schemes when it comes to tax.

There is another angle though. How can smaller companies compete with the large corporations. They already start with the disadvantages of scale and finance, and they may not be able to afford the complex international corporate structures to minimise their taxation costs.

I'm not sure I relish the thought of the single global corporation dominating the marketplace.

chewmylegoff

Consumers demanding the introduction of a revenue tax to replace corporation tax on profits is like turkeys voting for Christmas. It will just result in prices going up and companies making the same profits.

Plus, why should a company with a t/o of £100 million and costs of £10 million pay the same amount of tax as a company with a t/o of £100 million and costs of £110 million? It makes no sense and would ultimately damage economic enterprise as people won't want to take economic risks knowing that they have to pay a percentage of their turnover to the government whether or not they make a profit out of their business.

chewmylegoff

NB / VAT does not work in the same way as a revenue tax as if you make a loss you get a VAT rebate; companies only pay over the difference between VAT on sales and VAT on purchases.