British PM takes aim at corporate tax avoiders

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David Cameron David Cameron
SummaryFirms that are viewed as paying too little tax, such as coffee chain Starbucks, have been targeted by demonstrators and boycotts.

Prime Minister David Cameron on Thursday criticised multinational corporations that avoid paying their fair share of tax, promising action against such aggressive strategies after a public backlash in Britain.

The issue of tax avoidance by big business has turned toxic in recent years as millions of Britons struggle with low pay rises and austerity measures introduced to reduce the budget deficit.

Firms that are viewed as paying too little tax, such as coffee chain Starbucks, have been targeted by demonstrators and boycotts.

"I am a low-tax Conservative but I'm not a companies-should-pay-no-tax Conservative," Cameron told business leaders at the World Economic Forum in Davos.

"Individuals and businesses must pay their fair share," he said, adding that he would use his presidency of the Group of Eight industrialised nations to press the point.

Cameron did not mention any companies by name. At the height of the uproar last year, British lawmakers singled out Google , Amazon and Starbucks as companies that pay very little tax in Britain on profit from sales there.

The firms say they comply with British tax law, but under a tide of public outrage and demonstrations at its stores, Starbucks last year said it would pay around 20 million pounds ($32 million) in corporation tax in Britain over the next two years.

"Any businesses who think that they can carry on dodging that fair share ... need to wake up and smell the coffee," Cameron said, adding that he was not anti-business but wanted to keep tax rates low for everyone else.

Cameron's Conservative party has long been criticised for being close to big business, but the prime minister's speech indicated a change of tone towards companies avoiding tax.

"The public who buy from them have had enough," he said

Mounting Pressure

Much of the anger in Britain has come from smaller local retailers who are unable to take advantage of international tax arrangements while they struggle with high rents and low consumer spending.

With politicians ramping up the pressure, Goldman Sachs also came in for criticism over plans, since scrapped, to delay paying bonuses to its bankers in Britain to exploit an income tax cut for top earners that is due in April.

The bank changed its plans after being publicly rebuked by the Bank of England Governor Mervyn King. Despite growing public anger it will be difficult to change the rules.

"Cameron's statements on the taxation of multinational companies will no doubt receive strong support," said Ben Jones,

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