A majority of Indian workforce prefers to be entrepreneurs, says survey

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As being your own employer provides more exciting opportunities, 83 per cent of the Indian workforce says they would love to be an entrepreneur, reveals the findings of Randstad Workmonitor survey. A vast majority of male (81 per cent) and female (85 per cent) respondents said this and globally, 53 per cent of the respondents had this opinion. Also, according to the survey results, entrepreneurial ambition among the workforce is highest in India, with 56 per cent of the overall survey respondents indicating they are considering leaving their current job to start their own business. This preference does not change regardless of the gender. 

However, it is interesting to note that workforce in the age group of 45-54 years (37 per cent) are hesitant to start their own business as compared to the workforce in the age group of 25-34 years (72 per cent) and 35-44 years (61 per cent). Sixty-seven per cent of the respondents said if in case they actually lose their current job, they would like to start their own company. On the contrary, though 76 per cent considered entrepreneurship to be really attractive, they thought that the risk of failure is too big for them. Eighty-six per cent of the respondents indicated the ecosystem to run a start-up was favourable in India and 84 per cent were of the opinion that the Indian government actively supports new start-ups and provides a favourable entrepreneurial climate. Eighty per cent respondents from India also agreed that due to globalisation, small businesses have a hard time surviving now. A vast majority of 84 per cent prefers to work for a multinational company, reveals the survey.

MNCs operating in tax havens avoid reporting specifics

A study by the University of Toronto’s Rotman School of Management suggests that US tax reporting rules still make it easy for corporations to quietly shift and shelter profits in low-tax jurisdictions, avoiding public scrutiny. Reviewing 12 years of public reporting data for US multinationals, researchers found companies with more extensive operations in known tax havens were much more likely to group and report their foreign earnings by broader categories, rather than reporting by individual country. It is perfectly legal. US corporate tax rules require companies to disclose which countries they are operating in. But the companies don’t have to provide details as to how much they are earning in each place. Instead, they are allowed to — and usually do — report their foreign earnings more generally, such as by region, continent or even “total foreign earnings”.

That makes it harder for watchdogs and other stakeholders to track earnings and ask hard questions, including which companies may be attempting to dodge higher taxes, by claiming more earnings in lower-tax havens.

Rather than pointing out potential tax cheats, “we are more interested in whether outsiders can learn anything about these activities from the information companies must provide. I think the quick answer to that is, ‘Not too much, unfortunately’”, says Ole-Kristian Hope, the Deloitte & Touche professor and a professor of accounting at the University of Toronto’s Rotman School of Management. Prof. Hope conducted the study with Herita Akamah of the University of Nebraska-Lincoln and Wayne B Thomas of the University of Oklahoma.

The study analysed financial reporting data between 1998 and 2010 for every company incorporated in the US. Researchers manually sifted through the information to catalogue the countries where firms said they operated and compared that to how they disclosed and grouped their earnings. In addition to their main finding, the study also found that larger companies, those working in natural resources, retail, or in industries with low competition were especially likely to stay vague about where they were claiming their earnings. The results support calls by some policymakers and non-governmental organisations for US tax authorities to require country-by-country earnings reporting in order to identify companies’ tax avoidance practices.

Reports show the use of tax sheltering has grown significantly over the last 20 years. The use of sheltering in key tax havens has shifted from just over 13 per cent of foreign earnings among US multinationals in 1998, to nearly 26 per cent in 2010, according to US Bureau of Economic Analysis data. An estimated $100 billion a year has been lost in tax revenue due to use of tax havens by Fortune 500 companies, reports the US-based Citizens for Tax Justice.