The G20 finance ministers’ meeting this weekend is the last chance to deliver its commitment to help developing countries
benefit from the tax evasion crackdown, international development charity ActionAid warns.
Gordon Brown personally intervened at the London summit in April this year to ensure that the
communiqué committed G20 countries to finding a way for developing countries to benefit from the tax haven crackdown by the end of 2009. Brown also wrote to the UK’s crown dependencies
and overseas territories after the summit, urging them to enter into more tax information sharing agreements.
If the G20 fulfils its promise, it will enable developing countries to combat
tax evasion by multinational corporations who operate within their territories and allow them to significantly boost spending on essential health and education services and jobs.
But
ActionAid says the current model pursued by the G20 appears to neglect developing countries, and is calling for a new multilateral deal on automatic tax information exchange.
Many
poorer nations including Bangladesh, Ethiopia and Nepal collect less than 10% of their national income in taxation, compared to 37% in the UK. ActionAid has calculated that if all countries had
raised just 15% in tax in 2007, nearly £100 billion in new resources would have become available for developing nations to help combat poverty. This amount could put an end to world hunger six
times over or provide a school place for all children twelve times over.
Yet most adults in the UK are unaware of the scale of illegal tax evasion committed by multinational
companies operating in poorer countries. In a recent YouGov survey commissioned by ActionAid, more than three out of four people (79%) said that they had been unaware that developing countries
lose more money as a result of multinational companies illegally evading tax than they receive in aid.
Once they were given this information, nearly two-thirds (65%) agreed that the UK
government should help developing countries acquire the tools to prevent both tax evasion and avoidance by multinational companies. More than three quarters (79%) said it was important for the
government to push for stringent new international rules at the next G20 international meeting to prevent corporate tax evasion and avoidance.
ActionAid’s tax expert, Martin
Hearson, who will be at Saturday’s summit in St Andrews, said: “Developing countries lose more to tax evasion than they gain in aid. This denies governments the resources they need to
provide basic services like schools and hospitals.
“Saturday’s summit will be the litmus test of the G20’s commitment to involve developing countries in its tax
havens crackdown. Nothing less than a truly multilateral, global deal will do.
“Without it, we continue with the status quo of a two-tier system in which countries with the economic
power to impose sanctions can target tax haven abuse, whilst poor countries – which suffer most from tax evasion – are left out in the cold.”
[ Any views expressed in this article are those of the writer and not of Reuters. ]
Palestinian children climb on a tent near their house, which was destroyed during the three-week offensive Israel launched last December, in Beit Lahiya in the northern Gaza Strip November 3, 2009. ...
