• How a supermarket can explain the problems of tax corruption

    Posted by Marissa

    14 October, 2013

    MNCs, base erosion, profit shifting, subsidiaries, tax havens, transfer mispricing... lots of complicated economics terms that zoom over many of our heads, mine included.

    While determined to undertake further research and grasp the implications of what was being referred to as a complex and broken system, I came across a simple yet accurate analogy.

    Going to the supermarket, you are left with the choice of lining up for a cashier, or jumping to the self-serve machine. I was shocked to learn recently that it is not uncommon for people to cut corners and avoid accurately paying for things. For example, you can manually enter an item to pay 39c a kilo when it is actually worth $20 a kilo.

    It's wrong: it's unethical, it's stealing, and it's illegal....

    But because you're operating the transaction yourself and there's no one over your shoulder watching exactly what you're doing, you can get away with it. Amazingly, the supermarket company knows this is happening but from a business and profits perspective, it is actually cheaper for them to not pay the extra staff and risk the individual losses on items that people don't pay for!

    It's no surprise then that the same thing happens on a big multinational scale. It actually perfectly suits MNCs (multinational corporations) and OECD (Organisation for Economic Co-operation and Development) countries to ‘allow’ tax corruption because it's more profitable. Tax corruption is complex, but understanding it in its simplest form is that it’s wrong: it’s unethical, and it’s stealing the right to government services for the world’s poorest people.

    So while I leave the economics to the experts, I am determined to advocate for the poor and the responsibility all corporations have to pay their due. 

    Join us and Christians world-wide in prayer and action against corruption this week with the Exposed 2013 campaign. Find out more here.

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    Marissa Flynn is the Office, Intern and Voices for Justice Coordinator at Micah Challenge.