What if a government taxes a company on its revenue

Many multinational companies create a system for tax efficiency that they almost do not have to pay any tax in most of the countries where they operate. The UK government as well as the British people have been angry about such situation that multinational companies do not pay much tax but earn huge profits every year; therefore, the UK government is thinking about taxing these multinational companies based on their revenues instead of their profits. However, this has one problem that the government has to decide which type of companies the government will tax based on their revenues. It is impossible for the UK government to tax all companies based on their revenues, because this will hurt many British local businesses, especially those small and medium businesses which do not generate high profit returns. Then taxing companies based on their revenues is difficult in practice. Moreover, to compensate the losses in taxes, some multinational companies which have market power will increase their prices, this would create a cost pull inflation in the economy, which is something that the government does not want to see.

Therefore, although the UK government is publicly discussing how to tax these greedy multinational companies based on their revenues instead of their profits, such solution is not practical and even if it is used, it is possible to create a cost pull inflation and prevent foreign direct investment.