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Do tax evasion and ethics go hand in hand
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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