After yet more shocking revelations about tax avoidance games. We demand transparency now.
Tonight's new revelations on BBC Panorama, and in other reports based on the Paradise Papers, further emphasise the need for change in the global tax system and the UK must take a lead. As stated in BBC’s Panorama ‘the UK is the hub of the global tax haven empire’.
Government Ministers like Theresa May and Boris Johnson have the power to make it much harder to dodge taxes by increasing transparency but seem complacent about the scale of the problems they are facilitating. They have failed to match words with concrete and effective measures, and now seem to have given up on getting transparency in their own backyard. This damages the UK’s reputation around the world. The UK is responsible for its crown dependencies and overseas territories, and must act to end their secrecy.
The kind of schemes revealed are indicative of the games being played by companies and rich people across the globe to avoid meeting their financial and moral responsibilities to the rest of society. The losers in these games are all too frequently people living in some of the poorest countries in the world who lose billions of dollars that might otherwise be invested in education or health services or the infrastructure required to support their own development. It’s time to stop giving Aid with one hand and taking tax with the other.
Toby Quantrill, Head of Economic Development at Christian Aid, said: "These further revelations only deepen our sense of concern about the system and its impact on developing countries.
"It has been estimated by organisations such as the UN and the IMF that developing countries lose billions of dollars every year through corporate avoidance involving tax havens. This is money that could be spent on the social and economic development of some of the poorest and most vulnerable people. We need to see full public transparency. This should include public registers of beneficial ownership in all UK Overseas Territories and Crown Dependencies. The UK Chancellor should also make sure that UK companies report publicly on their activities, profits made and taxes paid in every country where they operate.
"Measures already instigated by the OECD, the G20 and under discussion in the EU are positive - but do not go far enough. There remain huge loopholes which continue to be exploited.
"It is now down to the UK Government to show proper leadership both unilaterally and internationally to ensure the system by which wealthy corporations can avoid paying their fair share of tax can finally be brought to an end."
As one specific example, the UK Government should legislate to require UK companies to publicly report their key financial indicators such as taxes paid in every country where they work. Following the Flint amendment to the Finance Bill in 2016, this will be simple to enact. The UK should also work to persuade other countries to do the same. But given that we've been waiting over a year for any decisive action on this, the time has come for change.