Tue, Jan 17, 2023 page11

• Oxfam urges extra tax on food firms

  ‘PROFITEERING’: The world’s super-rich 1 percent have in the past two years gained nearly twice as much wealth as the remaining 99 percent combined, Oxfam said

  • AP, LONDON
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  Food companies making big profits as inflation has surged should face windfall taxes to help cut global inequality, anti-poverty group Oxfam said yesterday as the World Economic Forum’s annual meeting gets under way.

  That is one of the ideas in a report by Oxfam International, which has sought for a decade to highlight inequality at the conclave of political and business elites in the Swiss ski resort of Davos.

  The report, which aims to provoke discussions on panels featuring corporate and government leaders this week, said the world has been beset with simultaneous crises, including climate change, the surging cost of living, Russia’s war in Ukraine and the COVID-19 pandemic, yet the world’s richest have gotten richer and corporate profits are surging.

  

  A man holds a placard during a protest ahead of the World Economic Forum in Davos, Switzerland, on Sunday.

  Photo: Reuters

  Over the past two years, the world’s super-rich 1 percent have gained nearly twice as much wealth as the remaining 99 percent combined, Oxfam said.

  Meanwhile, at least 1.7 billion workers live in countries where inflation is outpacing their wage growth, even as billionaire fortunes are rising by US$2.7 billion a day.

  To combat these problems, Oxfam urged higher taxes on the rich, through a combination of measures including one-time “solidarity” taxes and raising minimum rates for the wealthiest.

  The said noted that billionaire Tesla Inc CEO Elon Musk’s true tax rate from 2014 to 2018 was just more than 3 percent.

  Some governments have turned to taxing fossil-fuel companies’ windfall profits as Russia’s invasion of Ukraine sent oil and natural gas prices soaring last year, squeezing household finances around the world.

  Oxfam wants the idea to go further to include big food corporations as a way to narrow the widening gap between the rich and poor.

  “The number of billionaires is growing, and they’re getting richer, and also very large food and energy companies are making excessive profits,” Oxfam International executive director Gabriela Bucher said.

  “What we’re calling for is windfall taxes, not only on energy companies, but also on food companies to end this crisis profiteering,” Bucher said in an interview.

  Oxfam’s report said wealthy corporations are using the war as an excuse to pass on even bigger price hikes.

  Food and energy are among the industries dominated by a small number of players that have effective oligopolies, and the lack of competition allows them to keep prices high, the group said.

  At least one country has already acted. Portugal introduced a windfall tax on energy companies and major food retailers, including supermarket and hypermarket chains. It took effect at the start of this month and would be in force for all of this year.

  The 33 percent tax is applied to profits that are at least 20 percent higher than the average of the previous four years. Revenue raised goes to welfare programs and to help small food retailers.

  Oxfam said its analysis of 95 companies that made excess, or windfall profits, found that 84 percent of those profits were paid to shareholders, while higher prices were passed on to consumers.
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