Ed Miliband has called on the government to address international tax reforms at next month’s G8 summit, in the light of a number of internet giants being criticised for tax avoidance.
Speaking at a Google Big Tent event this week in London, the Labour Party leader urged the likes of Google, Amazon and Apple to become ‘responsible companies’ through ‘responsible capitalism’.
Miliband made comparisons between the culture of the internet companies and the culture of the financial sector.
His comments come as Google has been called in front of a Parliamentary Committee for allegedly not paying its fair share of tax in the UK, whilst Apple is facing criticism in the US for the same issue.
“The first and primary responsibility of government is to get the law right. I welcome Google’s call for international tax reform. The government should be putting forward proposals now to make this happen at the G8,” said Miliband.
“Those proposals should guarantee country by country reporting transparency to show how much profit firms are making and tax they’re paying.”
He added: “Reform of the rules on transfer pricing to stop companies from shifting profits unfairly. A crackdown on tax havens as well. I hope Google will support us in our endeavours.”
Miliband also expressed his disappointment at Google for arguing that it thinks that “when it employs thousands of people in Britain, makes billions of pounds of revenue in Britain, it’s fair that it should pay just a fraction of one percent of that in tax.”
He said that when Google goes to extraordinary lengths to avoid paying its taxes, ‘it’s wrong’.
Miliband also suggested that Britain needs a digital ombudsman to track anti-competitive practices as they emerge, which would provide information to government as they work with regulation at a European level.
The Labour Party believes that this would help small businesses and the creative sector from being stifled by the big players.
Miliband said: “Above all, if we’re to have a responsible capitalism we need to make sure that the opportunity offered by the internet is spread to a large number of small businesses, not restricted to a small number of large ones.”