Annual Public Lecture 2015: Rachel Griffith – Does Starbucks pay enough tax?

The 2015 Annual Public Lecture ”Does Starbucks Pay Enough Tax? – How and Why We Tax Large Multinational Firms” given by Professor Rachel Griffith at The Royal Institution, London. The idea that large multinational firms avoid paying their fair share of taxes by engaging in tax-avoidance activities is pervasive in the public consciousness. The US and UK media regularly report on the activities of individual firms and the taxes they have avoided. There have been public protests over tax avoidance activities, and the Organisation of Economic Cooperation and Development (OECD) has formed a commission to study the issue and made recommendations for reform. In this lecture Professor Rachel Griffith discusses some of the empirical evidence about the taxes that firms pay on their profits, the avoidance activities they engage in and the implications this has for the government’s ability to collect tax revenue. Surprisingly, there is relatively little evidence that the UK or US lose substantial amounts of tax revenue due to firms’ avoidance activities. This is surprising because it seems that there are ample opportunities for them to do so. Professor Griffith discusses why that might be the case, and some of challenges that governments face in effectively taxing firm profits.