Political Corruption in International Business

INTRODUCTION

Political corruption in international business is not an illegal practice but it is an unethical practice. Big corporations are able to use loop-holes in the law in order to avoid paying corporate taxes. In the UK this has been a regular practice since the birth of the internet allowing corporations to conduct business all over the globe but avoid paying taxes in the countries they conduct business. This practice is known as tax avoidance. It is important to note that this is not the same as tax evasion which is an illegal practice.

TAX AVOIDANCE

Many large and global companies have been in the news in recent years for avoiding paying taxes in the UK. Although this practice is not an illegal one, it certainly is a corrupt one. This shows that there are several occasions where legal and corruption are not the same thing.

Loop-holes in the law allow for big global companies to operate in countries such as the UK but because they are based in other countries, they do not need to pay corporate tax. This is not an illegal practice but many do feel that it is unethical and a corruption. Companies who have been named and shamed by using this practice include:

  • Amazon
  • Google
  • Starbucks

ACTIVIST GROUPS

It is only in recent years that tax evasion has hit the headlines in major newspapers such as The Guardian and on news channels such as BBC News. However it is activists and protest groups that have brought public awareness to this kind of corruption. In an edition of The Observer Newspaper ran a headline in September 2009 claiming that the UK government were to say this is a moral and not an illegal issue bringing this issue into the public eye.

Before tax avoidance hit the headlines, small activist groups such as UK Uncut were staging protests in stores around the UK. Newspaper headlines and protests have brought this issue to the public’s attention. Protests took place in stores such as:

  • Arcadia Group
  • Boots
  • Fortnum
  • Mason
  • Vodafone

CONCLUSION

Tax evasion is not seen to be a crime and instead it is seen to be a moral and unethical practice that many companies undergo in order to produce higher profit margins. At the moment the government are not looking to make this an illegal practice but is it time that this practice of tax evasion was made illegal?

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