STRATEGIES EMPLOYED BY MULTINATIONAL COMPANIES TO AVOID TAX1 INTRODUCTION

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STRATEGIES EMPLOYED BY MULTINATIONAL COMPANIES TO AVOID TAX1 INTRODUCTION

ABSTRACT

If there is a reduction in corporate revenue as claimed by Governments all across the globe, the cause or causes should be identified so that laws and policies will be put together to discourage the surge of tax injustice the world faces due to tax avoidance strategies employed by multinational corporations which has deprived governments of the much needed revenue for growth. Indeed, so much has been said and done to address the issue of tax avoidance strategies employed by multinational companies in order to avoid or even evade their tax liabilities but it seems that the overall effect of these policies is minimal. What is certain however is that tax injustice does not happen by chance. It typically happens as a result of careful and deliberate planning, more so in the case of the aggressive tax avoidance industry. Huge resources are devoted to this industry because the profitability of tax avoidance is far higher than that of most other types of financial services activity.2 This paper will identify some of the tax avoidance strategies employed by multinational corporations which keep on increasing as the days go by. Indeed these avoidance strategies do not descend from heaven; they are products of ingenuity from experts in law, accounting, banking and other financial experts.

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