Daily Management Review

Google Would Be Happy To Pay More Tax, Says Its CEO


01/26/2018




Google would be happy to pay more tax, declared the chief executive of the company as he also called on the authorities to reform the existing taxation system.
 
There is need for reformation in the existing tax system so that the concerns about some companies not paying up their fair share of taxes could be addressed, said Sundar Pichai to an audience at the World Economic Forum in Davos.
 
Speaking before the French president, Emmanuel Macron, challenged tech giants to pay more tax, Pichai said: “As a company we paid, over the last five years, close to 20% in tax. We are happy to pay a higher amount, whatever the world agrees on as the right framework. It’s not an issue about the amount of tax we pay, as much as how you divide it among various countries.”
 
There was a report published by a lawmaker of the European Union in autumn last year that claimed that many countries in Europe had lost out on total taxes of about 5.4 billion in taxes from large IT companies such as Google and Facebook between the years 2013 and 2015 as the companies had routed their profits through countries where the corporate tax rates were very low and the companies booked all their European profits in such countries to evade taxation.
 
Because of the fact that current tax system is based on the location of the research and development program of a company, therefore the tax system is to be blamed, argued Pichai.
 
He however pointed out that the issue would be balanced as the company has opened up an AI research centre in France this week.  
 
“We’re going to be hiring a lot of engineers in France, and we are doing that in Europe. Over time, that normalises the value of tax we pay, as it reflects where you create value,” Pichai said.
 
The Google chief argued that the lead should be taken by global policymakers and stresses that his company was “open” to any solutions. “We encourage the OECD to actually solve these issues, which would make it much easier for companies to operate.”
 
Pichai also called on and urged the world leaders not to make use of artificial intelligence systems for war while answering a wide range of questions. Countries working together was the only way that an arms race in military AI could be avoided, Pichai said. However, AI could actually be an “equaliser” between nation states, suggested Pichai. “Over time people will realise it’s tough to weaponise it because everyone will have the same ability [to fire] back.”
 
Macron asked in an address at Davos: “How can I say to a tech startup that you are going to be paying tax when a big multinational does not?”
 
Avoiding avoid a race to the bottom which could result in lowering of funds allotment to health, education and policies that are created to foster social cohesion, would be possible by creating international cooperation on tax, he said.
 
He added, that funds for retaining programs could be helped to be generated partly by technology firms which are not set to responsible for the potential loss of millions of jobs because of automation.
 
(Souorce:www.theguardian.com)






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