Cameron: UK will focus on tax avoidance at G-8

[January 24, 2013]  LONDON (AP) -- British Prime Minister David Cameron said Thursday he will use his country's year-long presidency of the G-8 to target tax-dodging tactics by businesses.

Public anger has been mounting in Britain after lawmakers accused major multinational companies including Starbucks, Google and Amazon of "immorally" avoiding paying tax.

Companies operating in Europe can base themselves in any of the 27 European Union nations, allowing them to take advantage of a particular country's low tax rates. Google has picked Ireland and Bermuda, Starbucks is based in The Netherlands and Amazon in Luxembourg.

Cameron said he plans to "drive a more serious debate" on tax evasion and avoidance at this year's meetings of G-8, the group of eight leading industrial countries, acknowledging that there is a difference between the two since tax evasion is illegal.

"But there are some forms of avoidance have become so aggressive that I think it is right to say these raise ethical issues, and it's time to call for more responsibility and for governments to act accordingly," he told an audience at the World Economic Forum in Davos, Switzerland. "This is an issue whose time has come."

He said the practice of companies navigating their way around legitimate tax systems thanks to "an army of clever accountants" needs to stop and businesses must pay their fair share.

"When one company doesn't pay the taxes they owe, then other companies end up paying more," said Cameron. "When some cowboys play the system, all businesses suffer."

He didn't name any companies but in an apparent swipe at Starbucks, said it was time for businesses to "wake up and smell the coffee" about public anger over their tax practices.

"When some businesses aren't seen to pay their taxes that is corrosive to public trust," Cameron said.

Starbucks -- along with Google, Facebook and others -- has been the target of public anger and demonstrations in the U.K. over its tax practices. Last month, the coffee chain bowed to mounting pressure and said it had agreed to pay more British tax than was required by law.

Britain's government also has said it is earmarking an extra 77 million pounds ($122 million) to clamp down on major multinational companies avoiding U.K. taxes.

[Associated Press; By CASSANDRA VINOGRAD]

Cassandra Vinograd can be reached at http://twitter.com/CassVinograd.

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