Mr Redwood’s intervention during the Prime Minister’s Statement on the Panama Papers, 11 April

John Redwood (Wokingham) (Con): According to the official Office for Budget Responsibility forecasts, we are likely to lose £7.3 billion of tax revenue to multinational companies over the ensuing five years because they will sue us in court and get the European Court of Justice to overturn the taxes we wish to impose, and there is another £35 billion at risk. What can we do here to make sure those companies pay their fair amounts, which this Parliament wants but the ECJ does not?

The Prime Minister (Mr David Cameron): We took a whole series of actions in the Budget, and of course we have the diverted profits tax, which is a tremendous weapon for making sure these companies pay their tax in the jurisdictions where they are rightly earning the money. This tool of being able to exchange tax information and having a common reporting standard, which is what we set in train in 2013, will make the biggest difference.

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One Comment

  1. Antisthenes
    Posted April 13, 2016 at 5:46 am | Permalink

    How little most of us understand the tax system. Few realise that the UK is just one cog in a global machine when it comes to taxing people and businesses. Other cogs notably the EU who have a considerable jurisdiction over out tax affairs, other nations who have different tax laws and even bodies like the OECD all make for a simple direct method of tax collection impossible. We clamour for everyone to pay their fair share of tax. Most do except it is often not paid where those clamouring want it to be.

    The system is probably equitable no doubt not perfect and could be improved. The best way to have it paid where people want it be is to have a national tax system that encourages that. Protectionism. restrictive practices and prohibition in the end never works. That way tax revenues will fall not rise.

  • About John Redwood

    John Redwood won a free place at Kent College, Canterbury, and graduated from Magdalen College Oxford. He is a Distinguished fellow of All Souls, Oxford. A businessman by background, he has set up an investment management business, was both executive and non executive chairman of a quoted industrial PLC, and chaired a manufacturing company with factories in Birmingham, Chicago, India and China. He is the MP for Wokingham, first elected in 1987.

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