Osborne's autumn statement

Britain's finance minister outlined plans Wednesday to plug loopholes that allow multinational corporations and banks to skirt billions of pounds in taxes each year.

In his annual Autumn Statement, George Osborne said the government would impose a 25 percent levy on multinationals' profits generated within the UK, to keep them from avoiding contributing their fare share of taxes to Treasury coffers.

Nicknamed the "Google tax," the rule change would hit big technology companies looking to exploit Britain's business-friendly legal system by shifting their profits from countries with higher taxes to those with lower ones.

"My message is consistent and clear," Osborne said as he announced a semiannual budget update. "Low taxes; but taxes that will be paid."

His announcement came a month after G20 countries pledged to increase efforts to prevent tax avoidance last month.

"We will make sure that big multinational businesses pay their fair share," Osborne added.

His statements came as public frustration brews over revelations that big household names like Apple, Google, Amazon, Facebook and the Starbucks coffee chain all use elaborate financial structures to pay as few taxes as possible.

Osborne also said he would put a stop to banks' ability to offset losses from the financial crisis five to seven years ago in order to avoid paying taxes on profits. This, he said, would raise 4 billion pounds ($6.3 billion) over the next five years.

He called it "totally unacceptable" that, according to the current rules, some major financial institutions would not be paying taxes for the next 15 to 20 years.

Britain's five biggest banks have more than 17 billion pounds ($26.7 billion) in loans on their books for which tax is deferred.

"The banks got public support in the crisis and they should now support the public in the recovery," Osborne said.

In his Autumn Statement, the finance minister also raised near-term growth forecasts for the British economy and lifted the pound by saying the UK would sell fewer bonds this year and next than had been previously forecast. Osborne did, however, say that his country would miss its deficit reduction targets.

cjc/ng (Reuters, AP, AFP)