Tax as an ethical issue for a country
In the language the common man speaks, tax is that fraction of their earning, which they have to part with but not willingly.
Tax is a subject that polarizes opinions. The governments say that it’s the duty of every law-abiding citizen and corporations that employ them to part with a portion of their earnings for the state’s welfare. The other side of the coin has the country’s nationals shaking their heads in disagreement over the use of their tax filings.
That reluctance to pay tax dues puts accounting firms in business that aid individuals and organizations in saving money. There are legal ways to avoid it, backed by the governments in the form of tax-free investments. Then there is the thin line between avoidance and evasion that leads to the topic of ethicality. Again, they can shield themselves behind the rules and directives of the region and shout out their innocence. Another though to be pondered over is, if tax-campaigners argue that a company has evaded tax but the enterprise proves it otherwise in the eyes of the law, who is right?
Take the case of a famous telecom giant. In two separate but similar cases, it was accused of evading taxes in India and the UK. In both instances, tax-hounds surrounded the multinational and barked their way to the court about financial misdemeanor. In both cases, the corporate was given a clean chit. Which means they worked around their taxes within the legal framework. Now – did the big establishment go the unethical way by flexing its monetary muscle to arm-twist the situation in its favor? Or were the tax-police unethical in misguiding the authorities with manufactured facts? There can never be satisfactory answers for questions like these.
Another famous case was that of an accountancy behemoth accused of helping clients avoid taxes. But avoiding taxes isn’t unlawful. Evading it is. Also, is this not the very reason for such concerns to exist? So, if they’re doing their work in accordance to the law’s guidelines, as they have the documents to show, can it be concluded that the system itself is too complex and there are plenty of shortcuts that can be taken legitimately? Therefore, can unethicality be sensed here? Yes, but it can’t be substantiated.
As if there wasn’t enough to juggle with already, yet another bombshell was dropped in the form of the Panama Papers recently. Where the work of investigative journalists reveled an elephant list of HNIs and A-listers guilty of siphoning funds to tax havens and escaping their tax duties. Backed by claims of sufficient proof to nail them after investigation formalities. If proved, then does it also attest that the policies are flawed and need an overhaul to prevent such happenings in the future?
To conclude, tax as an ethical issue for a country is a puppet show. And those that know how to use licit loophole ethically are the puppeteers. For the rest, all they can do is watch the manipulation helplessly.
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