Business Ethics and Financing: Navigating Challenges
Business Ethics
Nowadays, due to the economic crisis that arose in 2008, a huge number of business owners have faced difficulties maintaining their companies and also fulfilling their payment obligations. So, some of them have made a decision: tax evasion. This decision implies several consequences that affect society as a whole. For instance, when a person decides to evade taxes, it may happen that our sons or daughters will not be able to attend a safe school, as the money that was going to be invested no longer exists. Therefore, experts suggest several solutions.
- First, we find tax awareness. It is important to start at an early age so that, through education, a person knows the value of doing so and also what we obtain from paying taxes. In Spain, during 2015, the Treasury launched an advertising campaign with this aim. However, even though this solution may seem the best one, it is true that people are not aware of the importance of taxes, as they continue evading.
- Secondly, others have argued that another good solution is to establish a system of transparency. The main purpose of it is to implement a system that has all the information available for citizens so governments recover their citizens’ confidence, as they know where their money is spent. Currently, there are few countries in the world with such systems; for instance, we just find Iceland, Switzerland, or Finland. Nevertheless, it is clear that this system is not a success, as an enormous number of countries and their governments have not yet implemented it. We might think that for them, it is not a good solution for tax evasion.
- Finally, the last option we find is severer penalties for tax evaders, which is the action mostly chosen all around the world. In the USA, in some states, it may lead to the death sentence.
To conclude, recent economic events have developed a tough situation for some businesses whose owners have decided to evade taxes. This represents a problem for society, so through tax awareness, transparency systems, and penalties, it is hoped that it will change in order to build up a better world for all its citizens.
Business Financing
In the past decade, people lived in a period of time where access to financing was one of the easiest things to do. However, in 2008, an economic crisis exploded, and this situation changed dramatically. Business owners, entrepreneurs, and normal people have seen through the past years how access to financing was more complicated day by day, with a huge quantity of new laws and requirements. For example, it is easier for a big corporation like Porcelanosa that a bank accepts to lend it money than for an SME owner. Therefore, society has moved, and it has come up with new solutions.
- To start, one of the solutions we find are microcredits. They are loans that refer to small amounts aimed mainly at people without resources who cannot access the credits offered by the financial system. In underdeveloped countries, for instance, all along Africa, these types of loans have been very successful, mainly for women who can be more independent. However, microcredits are not very common in our area, so it is difficult to find them.
- Secondly, there is also crowdfunding. It is defined as a network of collective financing, usually online, that through economic or other donations, manages to finance a certain project. This type of financing is currently very common. In Spain, for example, there is the project ‘El Cosmonauta’ that raised 400,000 euros. The film El Cosmonauta was the first Spanish project to be financed through crowdfunding, also using a platform of its own. Launched just over a year ago, the first initiative of this nature achieved more than 400,000 euros thanks to the help of more than 5,000 people and institutions of all kinds. However, there is an atmosphere of mistrust, as there are still people who don’t rely on such online systems. For instance, the latest news on this type of financing is quite bad in Spain because of the Nadia’s case in Catalonia.
To sum up, even though the difficulties to access financing are there, society arises and has developed its own way, such as microcredits and crowdfunding. These, for people with fewer resources available, are good ways to start a new project or business.