Rupert Murdoch slammed 'posh boy' politicians over Google's UK tax deal
The media mogul tore into David Cameron and his government on Wednesday afternoon, labelling them "posh boys" and claiming they have been "awed" by American tech companies."Google et al broke to tax laws," Murdoch says - and as a result, argues there needs to be "strong new laws to [make multinationals] pay like the rest of us."
Murdoch made his call for tax reforms on Twitter, arguing that unless the practices of "global tech companies" are stopped, it will "ruin local businesses who pay." Murdoch's comments were previously reported on by The Guardian.
Google et al broke no tax laws. Now paying token amounts for p r purposes. Won't work. Need strong new laws to pay like the rest of us.- Rupert Murdoch (@rupertmurdoch) January 27, 2016
Global tech companies making enormous profits most places, funnelling $$ thru tax havens. Unless stopped will ruin local businesses who pay.- Rupert Murdoch (@rupertmurdoch) January 27, 2016
Tech tax breaks facilitated by politicians easily awed by Valley ambassadors like Google chairman Schmidt eg, posh boys in Downing St.@- Rupert Murdoch (@rupertmurdoch) January 27, 2016
Google has cleverly planted dozens of their people in White House, Downing St, other governments.Most brilliant new lobbying effort yet.- Rupert Murdoch (@rupertmurdoch) January 27, 2016
Labour is leading the criticism of the tax deal. On Monday, shadow chancellor John McDonnell was granted an urgent question in Parliament to ask about the deal.
He alleged that Google's "effective tax rate is now around 3%."McDonnell - and multiple other MPs - are calling on the government to fully explain how the £130 million figure was reached.
David Gauke, a treasury minister, defended the government (George Osborne, chancellor of the exchequer, was not present). He denied that there was a "special" tax rate for Google, but declined to comment on the company's specific rate due to confidentiality laws.
Boris Johnson, Conservative mayor of London has said that the amounts paid by tech companies is "derisory." He wrote in a column for The Telegraph: "We buy tens of billions of pounds' worth of American hardware, software and services - and yet these companies pay quite derisory sums in tax to the UK Exchequer: derisory, that is, when you consider how much dosh they are earning from us all."But, he cautioned, you shouldn't attack Google for this. "It is absurd to blame the company for 'not paying their taxes'. You might as well blame a shark for eating seals. It is the nature of the beast; and not only is it the nature of the beast - it is the law. It is the fiduciary duty of their finance directors to minimise tax exposure. They have a legal obligation to their shareholders."
In a letter to The Financial Times, Google VP of communications and public affairs defended the company's tax practices. "As a US company, we pay the bulk of our corporate tax in the US: $3.3bn in the last reported year. What should Google pay in the UK? We pay tax based on the value added by the economic activity of our staff here, at the current standard rate: 20 per cent."He added: "After a six-year audit we are paying the full amount of tax that HM Revenue & Customs agrees we should pay, including £130m in additional back tax. Governments make tax law, the tax authorities independently enforce the law, and Google complies with the law."
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