Boris versus Bezos:

A Conversation of Tax & Climate Change

Surinder Singh Head

By Surinderpal Singh

A Conversation of Tax & Climate Change – On the 20th of September 2021 the UK Prime Minister Boris Johnson met with Amazon founder Jeff Besos to discuss the matter of his company’s 2020 UK tax bill.

The meeting was prompted by the accounts Amazon filed through Companies House in 2020. Consequently, the filing confirmed that the company only paid a corporation tax increase of £3.8 million, despite sales rising by as much as 64% to £4.85 billion with a profit increase of 25% totalling £128 million.

This raised a number of eyebrows within the cabinet office. How indeed does a multinational leviathan like Amazon owe such a small tax bill relative to its income?

Pressure was mounting on the shoulders of Mr Johnson to arrange a sit down with the Amazon boss, particularly in light of the recent G7 Tax Deal that was designed to get multinational companies to pay more tax where they sell products and services.

How indeed does a multinational leviathan like Amazon owe such a small tax bill relative to its income?

Moving of Mountains

During the meeting Johnson pushed the agenda that Amazon should pay its fair share of taxes. Bezos was very clear that it was up to the government to create an appropriate taxing system for businesses to adhere to. Furthermore, Amazon would not simply pay taxes out of kindness.

So, as the post-meeting headlines for Boris centred on the continuing discussion about tax, including the 2% tax to be applied to digital sales; for Bezos the emphasis of this meeting lay elsewhere, as per a very telling Tweet that was dropped afterwards.

The matter of climate change and the “exchange of ideas” on this topic was certainly his headline over tax. Bezos boasted a $1 Billion grant towards conservation efforts from his business’ profits. This was a commitment Boris reportedly welcomed with open arms, in stark contrast to Bezos’ reception of Amazon’s back tax payments.,parley

Tax vs Climate

Tax or Funding for Climate Change?

The question here is whether a more stringent government imposed tax on big companies could potentially take from philanthropic, climate change battling money pots like the Bezos Earth Fund?

We can all appreciate the chain: tax loop-holes feed surging profits that are directly correlated with funding generous donations like Bezos’ $1 Billion. But does Boris Johnson’s approach to the Amazon tax situation present a glaring contradiction?

How can one realistically seek to impose a higher tax levy with one hand, but then expect large climate change donations amassed from the very profits earned from a lower tax bill with the other?

Can Mr Johnson realistically really have it both ways or should he make a decision on which payout will be more beneficial and sustainable in the long term?

We’d like to hear your thoughts in the comments below.

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