Question

The term ‘Base Erosion and Profit Shifting’ is sometimes seen in the news in the context of
(a) mining operation by multinational companies in resource-rich but backward areas
(b) curbing of the tax evasion by multinational companies
(c) exploitation of genetic resources of a country by multinational companies
(d) lack of consideration of environmental costs in the planning and implementation of developmental projects.

Answer 1

(b) (i) Base Erosion and Profit Shifting (BEPS) is a tax avoidance strategy used by multinational companies, wherein profits are shifted from jurisdictions that have high taxes (such as the United States and many Western **** countries) to jurisdictions that have low (or no) taxes (so-called tax havens). The BEPS project is said to be an “attempt by the world’* major economies to try to rewrite the rules on corporate taxation to address the widespread perception that the [corporations] don’t pay their fair share of taxes”.
(ii) BEPS aims to curb the tax evasion by MNCs, hence B is the answer.