MAY 10 ― Last week, we heard news that the Obama administration is launching a crackdown on international tax evasion following the revelations that came to light in the recently released Panama Papers.

While this is welcome news, I have to wonder why it took the spotlight of the world press to spur people into action when the blight of tax avoidance has shadowed us all for generations?

The very public shaming that the Panama Papers brought about impelled many to raise their voice in protest but for me,I have to say, the most surprising thing about the Panama Papers was that people were surprised at all.

The leak of documents from the Panamanian Law firm, Mossack Fonseca, disclosing the creative accounting and tax avoidance of the rich and powerful led to controversy and political uncertainty in countries across the globe. People’s incredulity at the “revelations” was indeed so powerful that it resulted in the resignation of the Icelandic PM and David Cameron releasing his personal tax returns, to name just a few.

To many, learning of the wealthy class' aversion to paying their fair share evoked shock and dismay; to others it was just confirmation of what they had suspected all along. After all, while the Panama Papers shined a glaring and unavoidable light on the issue, tax avoidance is nothing new. All-powerful multinational corporations have been exploiting the tax system in plain sight for generations, so why would we expect anything more from these powerful individuals?

Take Amazon for example, in 2012 Amazon’s UK subsidiary paid a measly £2.4 million (RM13.9 million) in corporate tax despite making sales of £4.3 billion in the UK market. This is while conducting its operation in a nation that has a corporate tax rate of 20 per cent; a rate considered relatively low in comparison to many of its European neighbours.

On top of this pitiful contribution there is also the major affront that, over the same time period, Amazon was awarded government grants to the value of £2.5 million to expand their business in Scotland. With some crafty tax dodging measures, Amazon actually managed to be paid by the UK government to continue to make profits from their people and infrastructure network.

The following year they did little to step up their game. In 2013 they paid just £4.2 million in corporation tax despite earning an estimated £4.2 billion in UK sales. 

Amazon continues to protest that they have done nothing wrong, that the company “pays all applicable taxes in every jurisdiction it operates within”, and they’re not wrong. By setting up their headquarters in Luxembourg, and classifying their UK subsidiary as nothing more than a service provider, they successfully, and legally, avoid paying UK tax rates.

In a legal sense, Amazon UK is nothing more than an incredibly busy and over staffed delivery service; their UK business employs 4,200 people in contrast to their Luxembourg based headquarters that currently staffs just 380.

By cunningly shifting their profits Amazon has successfully managed to divest exorbitant amounts of money from the British tax paying population that should rightfully be going towards stimulating the struggling economy and reinforcing the society in which they live.

Amazon is by no means unique in minimising their tax liability. There are many other similar offenders who include Google, Starbucks & Facebook within their ranks. These are globally dominant companies that are turning over billions of dollars in revenue and are similarly depriving inland revenue services of the countries in which they operate. The scale of the drain from public resources is quite simply staggering.

Put plainly, tax rules are being so abused by multinationals that they are close to breaking point. The Organisation for Economic Co-operation and Development (OECD) believes that big business, through their exploitation of the tax system, is eroding the tax receipts of global economies by £65-165 billion a year, and these are some of the more conservative estimates.

These are vast amounts of money that could otherwise be used to provide schools, contribute to healthcare, build valuableinfrastructure, increase social mobility and ensure a living wage for all. While this list of prospects sounds like a collection of idealistic political pledges that get peddled by politicians every election, they could in fact be made possible with the injection of money that is currently being siphoned from public funds. Make no mistake, there’s no shortage of money in this world, it’s just kept firmly out of the reach of those who need it.

The Panama Papers, far from “exposing” these indiscretions have simply provided the evidence needed to evoke action from those in the seat of power. Politicians can no longer turn a blind eye to this systematic abuse of the global tax system so let’s hope Obama’s action is just the start on a long road of global reform and moral reinvention.

* This is the personal opinion of the columnist.