Starbucks will face the MPs inquiry today on how it manged to dodge tax, as it managed to pay meager amounts to Britain while making big bucks in profits, just as UK Uncut, a UK-based protest group has announced that it will target Starbucks in its anti-tax avoidance demonstration, carried out throughout the UK. Alongside Starbucks, Google and Amazon would also face the inquiry by Select Committee today.
The Public Accounts Committee (PAC) which oversees monitoring of government financial affairs has asked Starbucks, Google and Amazon to provide evidence regarding their tax avoidance in Britain, amidst growing public pressure on government to question big multi-national companies that have repeatedly evaded taxes across the globe.
The direct action group UK Uncut plans to turn dozens of the coffee chain’s UK branches into creches, refuges and homeless shelters to highlight Starbucks sales tax avoidance tactics. On December 8, UK Uncut said campaigners would be selecting specific Starbucks branches will be targetted.
UK Uncut, the campaigning group, which has opposed government’s austerity measures, and which has organised protests against British telecoms operator Vodafone and pharmacist Boots over their tax practices, previously, is now geared to target Starbucks for its misdeed.
Last month, Starbucks sales tax evasion scandal emerged when it came to light that the coffee chain paid 8.6 million pounds in total UK tax over 13 years during which it recorded sales of 3.1 billion pounds.
Meanwhile, Google’s tax evasion tactics showed that the search giant avoided UK tax by channelling non-US sales through an Irish unit, an arrangement that allowed it to pay taxes at a rate of 3.2% on non-US profits.
Amazon evaded the UK taxes by reporting European sales through a Luxembourg-based unit. This tactic allowed it to pay a tax rate of 11% on foreign profits last year, which is less than half the average corporate income tax rate in its major markets.