Federal Tax

Efforts by Google to Avoid Tax Published by MP report

Introduction: A published MPs report alleges that Google has avoided taxes thru questionable tax arrangements.

As Chair of the Committee of Public Accounts, the Right Honorable Margaret Hodge (Member of Parliament) revealed that large internet company Google paid the UK government merely $16 million in taxes despite having accrued substantial turnouts of $18 billion from 2006 until 2011.

According to the MPs report, in an apparent bid to avoid paying taxes, Google allegedly sought refuge from paying its tax obligations to the UK government by focusing its advertising sales outside the UK, specifically in Ireland. Former employees of the giant internet company have revealed that staff based in the UK participates in the company’s advertising sales efforts, thus making the company’s argument highly questionable. In defense, Google strongly contended before the committee that it had practiced arrangements for settling its taxes with the UK government in a tenable and legitimate manner according to established tax codes. The company also agreed that its engineers perform product development in the UK, which renders indefensible its argument for its overly planned tax structure. This arrangement, according the MPs report, was Google’s method to avert paying established corporation taxes to the government of UK.

The allegations of avoidance of taxes against Google and several other large multinational corporations, such as Amazon and Starbucks, have not been centered on the company alone, as they have also rendered questionable Her Majesty’s Revenue and Customs (HMRC) office. The bigger problem lies in large accountancy companies that offer spurious configurations for avoidance of taxes to the UK government.

Conclusion: The reputation of large multinational companies has been damaged by the promotion of artificial tax structures by big accountancy firms in the UK.


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Posted by Taxmaster - February 1, 2014 at 4:15 am

Categories: Federal Tax, Income Tax, State Tax, Tax Evasion, Tax Law   Tags:

Cebu City’s school and hospital tax campaign may be reinstituted

The newly reelected mayor of Cebu City, Mayor Michael Rama, wishes to revisit the agglomeration of franchise and business taxes from hospitals and schools.

It is quoted from him that “The matter of franchise tax, scholarship and the taxes which may be due from hospitals and schools shall be addressed through a winnable and expedient solution”. He also emphasized that he has no interest in mocking the public, but he will accumulate taxes contentiously.

“We might have to sue some people. There are a lot of contentious matters,” explained Rama in relation to the franchise tax controversy.

He did not intricate on his statement but questioned, “Are they still giving to Pagtambayayong Foundation?”

Rama said he wants to pursue providing financial aid to senior citizens and persons with disabilities. He targets to provide senior citizens a cash allotment of P1,000 monthly by next year.

Rama demands for a comprehensive and serious meeting with the local government departments involved – Management Information Computer Service, City Treasurer’s Office, City Assessor’s Office and the business sector on the City’s tax collection, prior to thinking about fleshing out taxes to better nurse the public.

As to schools and hospitals executing business in their City, but who claim to be discharged from paying business taxes, Rama hinted of a possible compromise.

In 2007, Cebu Institute of Technology, Sacred Heart Hospital, Cebu Doctors’ University, Southwestern University, Cebu North General Hospital, Velez General Hospital and Cebu Doctors’ Hospital, lodged a suit to counter the City, hesitating to pay business tax.


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Posted by Taxmaster - January 30, 2014 at 1:25 am

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Additional tax means sub-quality communication

Additional tax levied to the telecommunications industry has a big impact towards the investors as well as the masses.

The telecom sector complained against the government on the five percent (5%) added tax slapped to their services. For nine years, they contribute more than Rs 510 billion to the government, which considers them to be a cash cow.

In India, telecom taxes had gone up to 10.3 percent, Bangladesh 15% and Pakistan 41.5%. This said increase would eventually affect the sector’s expansion plans and therefore compromise the quality of their services.

The tax collection goal of Rs 2.475 billion, if fulfilled, could actually reduce the means of communication. Should taxes go up, the telecom sector would force themselves to increase rates on their services, which may lead to wealthier people to conveniently afford them.

This could otherwise affect sales of mobile phones and mobile applications which may eventually decrease by half. Thus the government unilaterally imposed a sales tax to reduce the budget deficit on 3G auction licenses.

The lower-income sector argued that they have lost their chance to update their communication tools, saying the added tax is more on opposition, especially to the business sector, for not being able to maximize their profit-making.

This short-sighted decision does increase their burdens, they said, and adds to the problems of the telecom sector and hurting the reputation of the PML-N.

Despite all odds, Pakistanis still experience affordable call rates in the entire region. However, the days of affordable communications may seem to be over, and might lead them to get back to traditional means.


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Posted by Taxmaster - January 25, 2014 at 1:23 am

Categories: Federal Tax, Income Tax, State Tax   Tags:

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