Tax may seem like an obvious subject for this column (which was published as a Rant in the South China Morning Post’s Post Magazine) – nobody likes having their money taken away, do they? – but there’s been a lot of noise about it lately, mostly emanating from places that don’t have their houses much in order.
What our European friends – all up in arms about individuals and large corporations using various Machiavellian stratagems to shunt their wealth into tax havens – seem unable to grasp is that businesses nowadays don’t so much avoid tax as choose where to pay it (if production and sales can be easily shifted around the world, why stick to one tax jurisdiction?). The answer, garcons and frauleins, therefore is to shut up and be more accommodating – after the example of Hong Kong, where tax is simple, flat and low.
Of course, there’s plenty wrong with how things are done in this city: the government sneakily drip-feeds building land on to the market to keep prices high, the “trickle down” effect making life more expensive for everyone; it offers tax wheezes and loopholes and exemptions; and nobody bothers much to hold it to account. But, as Chief Executive Leung Chun-ying was keen to point out on his recent visit to the United States, our business-friendly arrangements do fill up the coffers.
Politicians in Britain, meanwhile, have seized on the word “immoral” to describe companies such as Google, at whose altars they previously worshipped; while campaigners styling themselves as modern-day Robin Hoods – quite forgetting that it was the Sheriff of Nottingham who collected taxes – have been doing the exchequer’s bidding by demanding corporations cough up more for the government to spend. The risk is they’ll frighten all the dastardly rich off to places like Hong Kong, leaving old Robin with no one to steal from.
This article was published in the South China Morning Post’s Post Magazine