This week the Labour Party announced plans to provide free broadband to everyone in the UK. This big election promise has been generating lots of headlines and debate. However, what hasn’t been discussed enough is how the party plan to fund this policy.
According to Labour, the ongoing costs will be paid for by changing the way in which global companies, including the tech giants, are taxed. The party wants to get rid of the existing system under which companies can slash their bills though playing clever accounting games.
The status quo means that big companies often pay peanuts in UK tax, while making billions of dollars in profit. At the heart of this problem is that the international tax rules are over a century old and were created for the movement of physical goods and services. The current tech-based economy allows companies to manipulate their activities and stash profits in places with low tax rates.
