The Chancellor of the Exchequer, Rishi Sunak, Britain’s Chancellor of the Exchequer, has been politically hit hard by the attack on his wife Akshata Murthy.
Akshata, daughter of Infosys co-founder Narayana Murthy, has been targeted by the opposition for not paying taxes as she has a non-domiciled tax status. She has now told the BBC she will pay UK tax on “all global income”.
There is little doubt that Sunak’s wife, Akshata, has done nothing wrong under the laws of Britain – she has the right not to pay certain British taxes under British law. Nevertheless, the wife of the Treasury Secretary, who earns tens of millions of dollars, but pays zero taxes on many of them, creates a negative perception. It made the front pages of the British newspapers.
The British minister has accused his critics of launching a “smear campaign” against his wife.
Sunak told The Sun before his wife’s announcement that “it would not be reasonable or fair to ask her to cut ties with her country because she happens to be married to me”.
“She loves her country. I love mine,” he said, adding that “every penny she earns in the UK, she pays UK taxes”.
In her statement announcing her decision to pay UK taxes on overseas income, Akshata said she did not want her non-resident status to be a “distraction” to her husband.
She stressed that she made the change “because I want to, not because the rules require it”, adding that the new arrangements will start “immediately”.
Akshata Murty, 42, owns nearly $1 billion worth of shares in Infosys, according to the company’s stock exchange announcement. This makes her richer than Queen Elizabeth II, whose personal wealth is about 350 million pounds ($460 million), according to the Sunday Times Rich List 2021.
The protests against Rishi Sunak and Akshata Murty started after the British government raised taxes in the midst of a cost of living crisis. The opposition accused Sunak of “breathtaking hypocrisy” and targeted him over his wife’s non-residential status that prevented her from paying UK taxes on her overseas income.
The pair were also targeted when Infosys failed to close its Moscow offices in the wake of Russia’s invasion of Ukraine, accusing Akshata of receiving “blood money” in dividends. Subsequently, the tech giant decided to close its office in Russia.
In politics, perception matters – and Sunak’s chances of becoming prime minister have been dealt a major blow – and this is clearly reflected in the UK gambling market.
Sunak was the clear favorite to become the next British Prime Minister – a month ago he had a 35% chance of becoming the next Prime Minister, 3 times higher chances than the next contender. Now, following his wife’s tax controversy, Sunak’s chances of becoming the next prime minister have fallen to just 12% – a plunge to just 1/3 of what it was before.
But the story isn’t over yet. View this space.