Facebook, Google and Microsoft not paying enough tax in developing world

Facebook, Google and Microsoft not paying enough tax in developing world

Google, Facebook and Microsoft should be paying more corporation tax in developing nations, says ActionAid.

The aid charity estimates that poorer countries are missing out on up to $2.8bn (£2.2bn) in tax revenue that could be used to tackle the pandemic.

ActionAid is calling for new international tax rules that force big companies to pay a global minimum rate.

Facebook declined to comment while Microsoft and Google did not respond to requests for comment.

Multinational corporations are currently not required by law to publicly disclose how much tax they pay in some developing countries.

According to ActionAid, “billions” might be at stake that could be used to transform underfunded health and education systems in some of the world’s poorest countries, especially since multiple tech giants have reported soaring revenues during the pandemic.

The aid charity wants to see a new global tax system created, preferably by the United Nations, whereby large corporations are required to pay a global minimum rate of corporate tax reflective of their “real economic presence”.

ActionAid estimates that $2.8bn could pay for 729,010 nurses, 770,649 midwives or 879,899 primary school teachers annually in 20 countries across Africa, Asia and South America.

The aid charity said its research showed that the developing nations with the highest “tax gaps” from Google, Facebook and Microsoft are India, Indonesia, Brazil, Nigeria and Bangladesh.

“Women and young people are paying the price for an outdated system that has allowed big tech companies, including giants like Facebook, Alphabet and Microsoft, to rack up huge profits during the pandemic, while contributing little or nothing towards public services in countries in the global south,” said David Archer, global taxation spokesperson for ActionAid International.

“The $2.8bn tax gap is just the tip of the iceberg – this research covers only three tech giants. But alone, the money that Facebook, Alphabet (Google’s owner) and Microsoft would be paying under fairer tax rules could transform public services for millions of people”.

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