Google chief executive Sundar Pichai warns the UK's go-it-alone plans to tax tech firms are doomed to fail
Google chief executive Sundar Pichai warns
the UK's go-it-alone plans to tax tech firms are doomed to fail and claims only
a multilateral approach via the OECD will work
- The tech chief said individual nations cannot act
alone to curb Silicon Valley
- The OECD has been drawing up plans but has been
criticised for slow progress
- Frustrated by the OECD, Britain and France have
started their tax plans
- European Commission's Margrethe Vestager warned the
EU will also press ahead
Google's chief executive has warned the
UK's unilateral plans to tax tech firms are doomed to fail.
Sundar Pichai, 47, said individual nations cannot act alone to curb the
huge Silicon Valley companies and unilateral taxes are 'not sustainable' and
would unravel.
He believes a multilateral approach with the Organisation for Economic
Co-operation and Development (OECD) is the solution.
The
intergovernmental body is already discussing plans to fairly tax big tech firms
but progress has so far been slow.
Pichai told The Telegraph: 'If there are unilateral
actions… I just think it's not sustainable. We are strong believers in the OECD
process.'
On Friday, European Commission vice-president Margrethe Vestager
warned the EU will press ahead with its own tax plans if the OECD fails to
agree a deal before January 2021.
She said: 'If no effective agreement can be reached by the end of 2020,
the EU should be willing to act alone.'
Vestager has
already levied fines on the company worth £7.5billion but many believe this is
nowhere near enough.
Frustrated by the lack of progress by the OECD, Britain and France have
started drawing up plans to act unilaterally with their own digital services
tax.
But Pichai said: 'To me it's a multilateral trade issue which countries
have to resolve and guide multinational companies.
'If the OECD arrives at the new framework and it's consistent for
everyone we would gladly comply and that's our role as a company, participating
in society.'
Last year,
Google's tax bill in Britain rose to £67million after a £45million increase in
profits.
The tech giant employs more than 4,000 people in Britain but it has
consistently been criticised for not paying enough tax, along with other US
companies such as Amazon and Apple.
In May, the
OECD announced plans for 'resolving the tax challenges arising from the
digitalisation of the economy', and vowed to create a 'unified long-term
solution' by the end of next year.
But the lack of progress led Britain to
publish a finance bill this year agreeing to introduce a two per cent tax on
tech companies' revenue by April 2020, according to The New Statesman.
However, the plans have frustrated the US who want a multilateral
approach to the tech issue.
Vestager has previously ordered Ireland to reclaim £14billion in tax
from Apple.
A recent study by Tax Watch claimed Facebook, Google, Apple, Microsoft
and Cisco avoided £5billion in UK taxes in the last five years.
Pichai, who has continued Google's rise since taking over in 2015, has
overseen profits of £12billion in the first six months of 2019.
Google, whose parent Alphabet is the world's fourth biggest company now
boasts a 92 per cent share of the UK search market and a 37 per cent share of
the global digital advertising market.
Pichai was paid £1.5million last year and has a personal fortune of
around £1billion, says it is not for him to decide if Google is too big a
company.
Who is Sundar Pichai?
Sundar Pichai has risen through the ranks
of Google
The future tech wizard was born to a middle class family
in Chennai, India.
His father was an electrical engineer for GEC while his
mother was a stenographer.
After excelling at school, he won a scholarship to
Stanford University, where Google and many other top companies began.
He joined Google in 2004 and worked his way up through
the ranks, helping launch Google Chrome.
The father of two, married to Anjali, was appointed
chief executive in 2015.
The big cricket fan has since overseen Google's share
price double during his reign.
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