Wednesday, 17 December 2014

Is it Right to Criticize Facebook for Paying the Bare Minimum in UK Corporation Tax

For the last several years now, and about this time of the year too, giant multinational corporations such as Facebook usually come under fire from politicians and the general public for paying the bare minimum in corporation tax. In previous years it was Starbucks, Amazon and Google. Now Facebook has come under the spotlight. Giant multinationals seem to be an easy target, particularly in the run up to an election year.

Image by Minette Lontsie [CC BY-SA 4.0] from Wikimedia Commons

Margaret Hodge, Lanour MP and chairman of the Commons Public Accounts Committee, has accused Facebook of:

"Using elaborate corporate structures and artificial devices for no purpose other than to avoid tax" and adding that "it is clear from opinion polls that the overwhelming majority of British people do not regard this as morally acceptable. We have to take tough action to crack down on this behaviour, and the UK should be leading the way on this issue"

So what happened? It has been revealed in several news media that Facebook, for the second year running, paid no corporation tax in the UK, despite having more than 33 million British user accounts. Instead Facebook has funnelled nearly half its global sales operations through Ireland and only paid the equivalent of £1.8 million in Irish tax on pre-tax profits of approximately £5.76 billion.

Can it be as simple as that? Is that why the British politicians are in a bit of an uproar? When it comes to taxation and tax laws, nothing is simple as black and white. According to an issue briefing by Her Majesty’s Revenue and Customs (HMRC), corporation tax is only payable in the UK if a multinational company has a branch residing in the UK. Where a non-resident company generates profit in the UK, corporation tax is only liable in the country where the company resides. If you feel the need to read the whole HMRC briefing, it can be found here.

In essence what it means is that having sales and customers in the UK is not the same as having a branch in the UK. In other words, our tax laws allow Facebook and other multinational corporations to do this and according to HMRC, this is not tax avoidance.

So if this is perfectly legal why is there such an uproar about the amount of corporation tax that Facebook and other multinational corporations have paid? Some say that multinationals have a moral obligation to pay their “fair share” to society and with such huge profits they can most afford it. However, this goes against everything our capitalist society is built on.

Ask any business student and they will tell you that publicly listed companies have a moral obligation to one thing - keeping their shareholders happy! As an example, look at what's happened to retail giant Tesco when it announced its fifth profit warning this year which sent Tesco shares tumbling 16% and wiping £2 billion off its market value. In turn some of the other supermarkets also lost ground. So when shareholders are dissatisfied with the performance of a company they speak out with their feet and can change the fortunes of a company in minutes! In extreme circumstances the dumping of shares might even cause a company to collapse. Any wonder then that Facebook is very keen to keep their shareholders satisfied and will pursue all legal avenues to try and increase profit. And remember, what they did this year and the year before is not illegal.

So should we blame the greedy shareholders for turning Facebook and other multinationals into morally corrupt profiteers? Well, no! Without shareholders Facebook would not be as big as they are or as successful as they are. In turn Facebook can use its success to invest in other parts of society such philanthropic projects or research and development into new technology. This then creates jobs and opportunities for other people in our society.

Politicians need to stop stereotyping large multinationals as tax cheats because the reality is they are not! They have broken no laws and have contributed to society by providing jobs and investments in the countries they choose to operate in. You might not agree with the way they do business but everybody does it and that is how our taxation system works.

Author: Vin Coh

Sunday, 14 December 2014

Five of the BEST Commercials on TV

In this world of automation where everything is made easier, one of my favorite inventions is the DVR for recording television programs. I don't even know what day of the week or what time some of my favorite shows appear; I just set them up to record and watch when I have time.

Naturally, I fast forward through commercials so I can see an hour show in about 40 minutes. I don't think this is very good for the advertisers, but every once in awhile, a commercial catches my eye so well that I actually stop to watch it. If it makes me laugh, that is a real coup for whoever thought of it, as that is extremely rare.

I made a list of the five best commercials in my opinion. See if you agree.

SUBARU LEGACY
STATE FARM INSURANCE
ESURANCE
STRAIGHT TALK
NATIONWIDE INSURANCE

WOW, I just realized three out of the five were for insurance companies. Why do the insurance companies have the best marketing people? That may be another topic for another blog sometime. Perhaps they pay people the most money to be clever, since insurance is kind of a yucky, bland topic. Whatever it is, these three, along with one for a car dealer and one for a cell phone service hit the right buttons for me.

The Subaru Legacy commercial was so cute, I didn't even know what the product was. All I remembered was the adorable little boy riding in his toy kiddie car smiling at his Daddy who had just gotten home in the family automobile (thus the Subaru I hadn't noticed) and held out the keys to his little son with a question in his eyes, "want to drive?" The rest of the commercial is a series of daydreams, as the little boy cruises past his friends, but then hits real life head on. Dropping people off, getting a parking ticket (what's a meter? He asks the officer), sitting in slow traffic and other mundane events that happen to adults who drive inspire the little boy back to his own world. The punch line is so cute: "No, Dad, I'm good!"

State Farm Insurance starts out with two young women shopping. One finds a purse she wants, takes a look at the price tag and sings out a little ditty: "State Farm Insurance, like a good neighbor, FIND ME!" Her insurance man, named Anthony by the way, shows up like a genie. Asking him how much she saved and reassured she can by the purse scrambles off to pay for it. The other girl, surprised at such an event decides to try it: "I don't have State Farm, but insurance FIND ME!" Well, a wily old man in fishing gear appears with a pole and a dollar bill on a hook, which he dangles in front of her. Disgusted she at least tries to grab it and misses. Punch line: "Oooh you almost had it! Got to be quicker!”

The crazy lady in the esurance commercial is great. Since I am a savvy senior citizen who knows and loves technology and Facebook, I can laugh at it, but there are actually peers of mine who may not get the joke at all. She is playing the internet game of "Candy Crush" on her table with real candy and a hammer. She explains to her friend that she is so happy to have learned about it and also about saving money on her insurance in 15 minutes but not understanding the concept at all. Her friend shakes his head and gives esurance their plug, but all eyes are on the lady playing the game. She smashes the candy to smithereens, shouting "3 in a row!" and then once when a piece of candy flies up and hits her tea cup, making a small ding sound, she says, amid my laughing fit, "level 3!"

The Straight Talk commercial may be my favorite although it may not sink in the first time it is watched. A woman, talking on her cell phone with her rather meek and mild hubby following her out to a parking lot, has her car keys in her hand. She walks up to a gorgeous Bentley Armage and is clicking away with her door opener for a few minutes while still talking. Puzzled, she stops her phone conversation, turns to her husband and says "why isn't this working?" In a very sing song no-inflection voice he explains, "because we drive a station wagon." As the woman, aghast at the news looks over at a different area of the parking lot, the voice-over explains that when you have Straight Talk service for your cell phone, that you FEEL RICH and may get confused.

The last commercial on my list is not funny but awesome and riveting; the Nationwide commercial with the sexy cat-burglar doing all the fancy tricks around the apartment replacing items that have been stolen. The choreography of the tricks is the whole shebang as far as I am concerned, as I love watching gymnasts. The cat-burglar is played by actress/country singer Jana Kramer, but alas, she doesn't do her own tricks. No word on who the gymnast is, but Kramer does sing the Nationwide jingle, "On your side" at the end, and the voice-over work is none other than Julia Roberts.

by Sally Bartlett


Saturday, 6 December 2014

How the Internet and Technology Changed Education and Learning at Top Universities

It is more than 15 years since I completed my first university degree. And back then things were tough. All I remembered was spending hours upon hours at the library, photocopying articles upon articles to complete my assignments. Only to discover that most of the articles I photocopied were irrelevant! Then it was back to the library for more photocopying. How I managed to get through my university years... I don't know!

Image by ragesoss [CC BY-SA 2.0] via Wikimedia Commons

This was a time before Google. A time where the 486 micro processor dominated and smart phones were still a figment of Steve Jobs' imagination. A time when the Internet was a play thing for geeks, and buzz worlds like "selfies", "Twitter" and "facebooking" did not exist.

About two years ago I returned to university to complete my MBA and things have dramatically changed. Gone are the days of spending countless hours in the library and hello to doing everything online. Every journal and academic resources were available to me at my finger tips. Photocopying was gone and now we have pdf's. Mobile technology and social media allowed me to stay in constant contact with lecturers and tutors. What a difference 15 years has made.

There is no doubt that technology has changed the way students study at universities. New tech is constantly being fed into the learning cycle. Some of the positive outcome include:

  • Audio and visual teaching aids have transformed the classroom, allowing for a richer learning environment and greater student participation.
  • Access to academic resources have never been easier as most universities start to bring everything online. As technology develops many universities are even starting to share resources thereby increasing and enhancing the available knowledge.
  • Communication and access to academics for feedback have never been more straightforward. In turn this has helped to improve interaction between peers and foster a cooperation unlike before. 
  • Technology has also helped to bring down one of the biggest barriers to higher education, geographical limitations. Many of the top universities are now experimenting with online courses meaning that people from all over the world can receive a first class degree. Of course this only works for some degrees and not all courses can be completed online.

However, with the good there also comes the bad and in some cases, the ugly. Although it is generally agreed that the impact of technology on our education system is mainly positive, there are some negative impacts too. These include:

  • An increased temptation to plagiarise by simply copying and pasting from online resources. This is probably the most serious of academic sins and can get students expelled from a course.
  • Meeting deadlines for submission of work has deteriorated with students leaving assignments to the last day, last hour or even last minute. New technology does not seem to improve the mindset of some students when it comes to submitting assignments and essays.
  • A heavy reliant on Google to always be there. This in turn has developed poor organisational and research skills. Rather then reading original sources and making their own decisions many students simply ask Google for the answers.
  • Technology, particularly miniature gadgets have also help to make it easier for students to try and cheat during exams. These include smart watches and miniature cameras where exam papers can be photographed and redistributed.
  • Social media such as Facebook and Twitter can be a distraction allowing students to loose focus and concentration.
  • Poorer reading and writing skills due to an over reliant on technology. In turn comprehension has also decreased and some students lack the basic skills to formulate ideas and solve problems.

While it can be argued that in this day and age there is less a need for learning how to use a pen nevertheless proper writing is an integral part of learning. Being able to formulate ideas and provide solutions will become an integral part of any employment opportunities. And technology in our education system can help to foster these essential skills. This what our education system should try and develop.

New technology is constantly being developed and computers are becoming more and more capable of controlling our lives. What will our universities look like in the next 15 years? Augmented and virtual realities are starting to become powerful tools and could change the way our children and our children's children are educated.

Like any tool, technology is only as effective as the person wielding it. It can be used to enhance or hinder the process. Our challenge now is to make sure that we use it at the right time and for the right purpose.

Social media too will no doubt change the way we interact with one another and the way we do business in the future and it will probably change the way we also learn. It will be exciting and challenging at the same time - let's see what happens.

Author: Vin Coh