Michael, 13th September 2017
About 5 years ago in 2012 there were several high profile cases of tax avoidance which caught UK national attention where big firms such as Google, Amazon and Starbucks were accused of avoiding UK and European taxes by the UK government and the European Commission by diverting hundreds of millions of pounds to secretive tax havens. In particular Starbucks was alleged to have only payed £8.6million in corporate taxes over 14 years despite generating £3billion in revenue over this same time period including no tax payments on £1.3 billion of sales in the three years prior to 2012 according to a Reuters special report in October 2012. This begs the question of whether businesses have the obligation to contribute a much higher portion of their proceeds earned from the monetization of their products to the wider community at large. Since a business is essentially an entity which resembles the collective interests of various stakeholders both internal and external all synthesized together. I believe the role of ethics in business for a corporation is to deliver on the interests of as many of it’s stakeholders as possible as well to deliver each stakeholder’s interests to as high a standard possible so long as the business remains profitable and sustainable.
While there are growing calls for there to be political pressure on forcing corporations to cut back on their endless quest for more profit and only delivering for their essential core stakeholder’s such as shareholders and instead start focusing more on the well-being of society at large. However this may not be feasible, we are in a bit of a predicament because if governments intervene too much in business and do not allow companies to be dynamic and effectively monetize their products and services to customers and thereby reap the benefits of their hard work then there will be no incentive for any corporation to exist and operate to actually generate wealth if it would all be for nothing in the end, hence inadvertently hurting wealth creation and the prosperity of society.
Therefore using the theory of Corporate social responsibility I believe that companies have the obligation to treat all individuals or stakeholders affected by the company’s decisions with decency and respect. This means that there must be a balance where companies have the obligation to not commit tax avoidance and contribute to the well-being of society at large, as well as pay their employees acceptable wages while simultaneously being able to effectively monetize their products to benefit their stakeholders and remain functional. Lastly in addition to this corporations should also try to fulfill other business ethics theories such as Corporate environmental responsibility and corporate honesty etc.
Citations:
-Bergin, Tom. “Special Report: How Starbucks avoids UK taxes.” Reuters, Thomson Reuters, 15 Oct. 2012, uk.reuters.com/article/us-britain-starbucks-tax/special-report-how-starbucks-avoids-uk-taxes-idUKBRE89E0EX20121015. Accessed 11 Sept. 2017.
-“Starbucks.” Wikipedia, Wikimedia Foundation, 11 Sept. 2017, en.wikipedia.org/wiki/Starbucks#European_tax_avoidance. Accessed 12 Sept. 2017.