Since the news broke yesterday that Starbucks have not paid any tax in the UK for three years, the public outrage has been steadily growing.
As Rachel explained yesterday, it’s a particularly interesting case for us, because Starbucks are using many of the same tricks that we found Grolsch and Peroni owner SABMiller using to dodge their bills in Africa.
The bigger question is what we can do about this corporate tax avoidance on this sort of scale.
I think that putting pressure directly onto companies is vital, which is where quick fire twitter campaigns like @TryAnotherCup really come into their own.
Companies need to know that people really do care about how much tax they’re contributing to society – and that we won’t stand for such flagrant avoidance of their responsibility.
There are constructive steps that any company can take, such as becoming more transparent and ruling out abusive, artificial payments into tax havens and integrating tax justice into corporate responsibility approaches. There are loads of ideas in our Tax Responsibility briefing.
But ultimately, voluntary measures from individual companies won’t cut it. 98 of the FTSE100 use tax havens (and lots of them) and we can’t boycott everyone.
Both the Starbucks and SABMiller cases show the massive loopholes in international tax rules that enable big companies to legally siphon their profits offshore. It’s these rules that urgently need to change.
That might sound like a huge task – but there are things individual governments like the UK can do. We could make it harder, rather than easier, for companies to use tax havens. We could make companies operate more transparently, which would discourage profit shifting offshore. We could work together with other countries to tackle tax dodging by individual companies.
Done right, both the UK and developing countries stand to benefit. And that wouldn’t just raise more money that could be invested in the fight against poverty. It would mean that local business like Marta's market stall in Ghana, or your local independent coffee shop could compete on a level playing field with the multinationals next door.
We need to both pressure companies directly to stop tax dodging and changes to international rules that make it possible in the first place. A change is brewing...