Professor Rita de la Feria discusses the leaked Paradise Papers on BBC 5 Live
Professor Rita de la Feria, Professor of Tax Law, has spoken to BBC Radio 5 live about the questions which have arisen following the leaked Paradise Papers.
In the last few days Apple, Lewis Hamilton and Bono have been in the spotlight over leaked tax arrangements, alongside many other big companies and wealthy individuals. Whilst none of this is illegal it does raise the question about morals and the laws surrounding tax evasion.
Rita pointed out to listeners that since the financial crash and Panama papers, “there have been quite a lot of attempts on decreasing the levels of tax avoidance and a lot of measures to increase transparency… there is a bigger issue though - every time you close a loophole another one may open so it is a bit of a cat and mouse situation. You’re always one-step behind, so long as companies have their incentive to move headquarters to get a lower rate of taxation.”
Rita suggested that this will continue to be the case until a better way to tax corporations at international levels is found:
The only medium to long-term solution is to remove incentives. Two current proposals are the Global Formulary Apportionment and Destination Based Tax which both aim to do that.
Whilst acknowledging that a global agreement is unlikely to be achieved given countries competing for company headquarters, Rita proposed that it is theoretically possible for the UK to reform its tax system in a way that prevents movements to tax havens.
Listen to the interview on iPlayer (available for a limited time only)