ArcelorMittal « Dr Alf's Blog

HM Revenue & Customs (Photo credit: jam_90s)

The words “could face” give the game away.

Google will face next to nothing and even if they are made to pay something more to HMRC all they will do is get rid of some people and the taxpayer will end up paying their dole and will save nothing.

Dr Alf’s solution of giving HMRC more clout and resources will not work either because the multinationals employ the best lawyers and accountants and can run rings round HMRC or any of our Civil Servants who are not streetwise enough and far too predictable.

They are capable of going after “little people” like Avon ladies, taxi drivers, fish and chip shop owners and micro businesses which trade on the internet through UK registered websites.

When it comes to major multinationals like Amazon, Microsoft, Google, Vodaphone, Arcadia Group PLC, Virgin PLC, Arcelor Mittal, Eon, Glaxo SmithKline and others HMRC is a toothless paper tiger.

The solution is to have lower and flatter rates of corporation and personal tax which eliminate the need for tax evasion and encourage money held offshore to be brought back onshore.

Singapore manages this with stringent compliance and tax rates higher than those prevailing in the Dublin Financial District where Google bases its European operations and is poised by 2016 to be the 2nd global financial center whilst the City of London is relegated to 4th position.

The problem is tax rates which are too high in the UK, too much Government waste, an unaffordable public sector, far too many civil servants, too many lazy and unproductive people and malfeasance arising from the plundering of the public purse which has been going on for years.

John Gelmini

TATA tanker (Photo credit: VinTN)

What Dr Alf and the Economist have identified is a problem with the Indian economy and the inability of the Indian Government to plan ahead properly and regulate corporate practices and their own convoluted decision making processes.

A year ago, Indian business-people were surveyed to identify who they least wished to do business with.
The answer came back as themselves, to the point where they said they preferred doing business with anyone else but themselves.

Those Indian companies which operate globally and the IT/BPO/Software development industry which has to do much of its work in America are not afflicted with this sort of malaise and the same applies to Tata and Arcelor Mittal steel.

In a country with huge tracts of arable land we have the paradox of people starving whilst others live in regal splendour.

Then, we had the spectacle of the Commonwealth Games, where the facilities remained unfinished until the day of the opening ceremony and the nuclear submarine which caught fire and exploded.

A degree of Tescoisation is necessary to bring discipline into the food chain but also into other sectors of the Indian economy which remain mired in restrictive practices,corruption and are held back by Government Ministers who lack the necessary sense of urgency to deal with the scale of the problem and who as a consequence are creating an Indian brain drain to the West and to America in particular which is doing that country no good at all but is very good for companies like Google and Microsoft who would not be where they are without them.

John Gelmini