'Everyone has moral responsibility to avoid paying tax'
But while people across the globe criticize the businesses for their taxation decisions, others say their choices to dodge high tax rates are anything but immoral.
“When you allow the government to take a huge chunk of a nation’s income through taxation, the result is not just that it’s detrimental to individual rights, but also that the things the government does are done very poorly,” spokesman for consultancy firm HJC Group, Toine Manders, told RT.
“The government uses tax money to buy a whole army of bureaucrats who write billions of new rules and create a lot of damage. When you pay too much tax, you’re morally co-responsible for the damage the government does,” he said.
Manders spoke to RT about taxation, healthcare, and the free market.
RT: Everyone wants to pay as little as possible – but we're talking about the EU losing around a trillion Euros a year from tax avoidance and evasion. How do you justify this, during a crisis, when people are seeing what little cash they have taken in austerity?
Toine Manders: I believe every individual has a right to keep the fruits of his own labor. Every individual that produces something is entitled to what he’s produced. So it’s a fundamental human right.
RT: It sounds lovely on paper, but if you don’t pay your taxes, you don’t get a lot of things done. Surely you have to pay your taxes, don’t you? Especially if you hope to live in a country with free healthcare and other services?
TM: Well there’s no such thing as a free lunch. So free healthcare isn’t really free. We pay through the nose through our tax system. Taxation is actually a very inefficient way to get services. It’s much more efficient to have it done by the free market. In the free market when there’s competition between companies, prices go down and quality goes up. So when you allow government to take a huge chunk of a nation’s income through taxation, the result is not just that it’s detrimental to individual rights, but also that the things the government does are actually done very poorly.
RT: Why do you think governments keep bringing up the problem of tax avoidance, but fail to do anything concrete to change things?
TM: That’s because fortunately, we don’t have a one world government. We have 200 countries in the world and every country has the right to set their own tax rates and decide what their tax policy is. and that’s why we have tax competition. That’s why companies can escape high tax burdens by taking advantage of the fact that there are countries with low tax burdens. And that’s why individuals can also take advantage of tax competition which is actually beneficial because tax competition is what keeps tax down. In 1980, our tax rates were almost double what they are today and the reason they dropped so much worldwide is because of tax competition.
RT:You mention the free market should be in charge of healthcare. What about the American system? You can’t say that’s working very well, can you?
TM: No, I think the US healthcare system is horrible and that's because of government intervention. The healthcare system in Singapore is a much better system. There is very little government intervention in Singapore. It's almost a free market in healthcare and as a result, the quality is very high and the prices are very low. That's why a lot of Americans fly to Singapore – because they get better care for 1/3 of the price.
RT: You've seen the public anger at large companies avoiding paying taxes – such as the recent protests against Starbucks in the UK. Those people have a bigger tax burden because big firms can employ accountants to get clever with profits – where does social responsibility kick in?
TM: I think every individual has a moral duty to avoid as much tax as possible because you can avoid tax – which means you can lower your tax burden legally and decide not to pay more than you’re obliged to under the law. And the government uses the tax money for bad things. It uses it to buy a whole army of bureaucrats who write billions of new rules and create a lot of damage. When you pay too much tax, you’re morally co-responsible for the damage the government does. So I think every person has a moral obligation to pay as little tax as possible under the law.