It’s been estimated that multinational companies avoid paying $160bn worth of taxes to developing countries every year. That’s roughly $60 billion more than the global aid budget.
According to Tax Justice, a group of economists, lawyers and activists fighting for progressive and equitable taxation, tax avoidance on this scale “heightens inequality and poverty, corrodes democracy, distorts markets, undermines financial and other regulation and curbs economic growth, accelerating capital flight from poor countries, and promoting corruption and crime around the world.”
Tax justice is particularly pertinent right now because the G20 finance ministers will meet in Scotland on the 7th of November. Which is why Action Aid are running a campaign to highlight the absurdity of corporate taxation avoidance and pressure the G20 into addressing this issue to make sure that everyone pays the amount they owe – especially to developing countries. Action Aid has more details about how companies avoid tax, and how to get involved in the campaign.
Tax is something of an ‘Cinderella’ issue in international development. However, as the figures clearly show, it’s an issue which has an enormous impact on the lives of those living in the developing world. If you want to ensure that it’s an important issue at the meeting of G20 finance ministers in Scotland, then contact the Treasury Minister responsible for tax, Stephen Timms, or the Chancellor, Alistair Darling, and challenge them to explain what the British Government is doing to address tax justice.
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This is definitely an interesting subject.
Funnily enough when I worked in Ethiopia one of the things the Government was trying to crack down on was international workers from charities avoiding paying tax …