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G8 leaders should crack down on tax

It would be naive to think that any company, especially a multi-national corporation, would not seek to protect its profits through exploiting every tax efficiency it can.

So there is little surprise in learning that Marks & Spencer sells online to Europe through a subsidiary based in Dublin where corporation tax is 12.5% compared to the UK rate of 23%.

That, not unexpectedly, has led to criticism and comparison with internet giants Amazon and Google who pay relatively little tax in the UK in spite of huge sales.

While there is no suggestion that any of these companies is doing anything illegal, ordinary consumers, who find themselves taxed to the hilt with both direct and stealth levies on their often modest incomes, view the arrangements with some distaste. They feel they are paying a heavy price in these times of austerity while huge companies are profiting through shrewd accountancy.

We in Northern Ireland are all too aware of the appeal of the Republic as a base to do business thanks to its low rate of corporation tax. And we feel that if it bordered the Home Counties in England instead of Northern Ireland, the UK rate would already be harmonised.

In spite of the compelling argument that lowering corporation tax would be a very useful lever to attract more inward investment to Northern Ireland, the issue has continually been put on the long finger and increasingly looks like a forlorn hope.

But there is one final chance for action. The Prime Minister has put the issue on the agenda for the G8 conference in Fermanagh next month.

He will be appealing to the other members to take action to rein in the Amazons and Googles of the business world and stop them moving their resources around the globe to beneficial tax regimes.

If the leaders of some of the world's leading economies can reach agreement on this it will be a powerful blow against one of the more unappealing sides of capitalism and make Fermanagh a name synonymous with fairness and equity.

Belfast Telegraph