Tax Evasion and Ethics

Who did it?

eBay avoided £ 50m in tax

Starbucks paid less than 1% tax on its profit

IKEA halved its tax bill

Former Italian Prime Minister Bersculoni

List goes o ….

How do they do it?

Special Purpose Entities (SPEs)

Sister Company

Round Tripping

Tax havens

Influencing audit committees

Who is affected?

Government

Less of taxes

Profits siphoned off to other countries

Fiscal deficit

General public

Less spending from govt., less benefits!

Opinion too varied and depends on the culture

Greece has a major tax evasion problem

In India, Tax evasion is rampant

Specialized persons or firms guide on tax avoidance

Another way is bribing the Income Tax officials

The problem is more prevalent among the self employed

Even doctors, chartered accountants or property valuators, ,builders , chartered engineer ,cine artists , tax consultants, stock brokers do tax evasion

Reason for Tax evasion is lack of trust in government

Results into black money which causes illegal activities

Where there is usi ess ethi , there is a lo g-term

loo .

Is there a company that can get success without ethics?

Fro the fa ts, the a swer see s to e NO Whether E ro or A derso or our ow “atya , they

all finally paid for their Unethical Practices.

Arthur Anderson the one-time Big 5 accounting firm

went entirely out of business, affecting 22,000 workers,

most of whom had no connection to Enron.

Fiercer statutory regulation of the auditing profession

Mandatory rotation of audit firms so that individuals

do not become too committed to their clients

Stronger non-executive directors who can work as a check

against malpractices by powerful CEOs

The Government should levy a minimum tax on annual

revenue earned by a Company

Reputation management and competitive advantage

Enhanced social license to operate

Employee satisfaction

Risk management

Performances

Minimised environmental impacts