Today’s press release from Christian Aid highlights the need for governments to coordinate their actions when it comes to tax avoidance. There’s been plenty of talk over the last few months about the way companies such as Starbucks and Amazon are resisting pressure to contribute more to the UK economy, but the same practices can have a detrimental effect that is far greater for many developing countries.
In 1970, the world’s rich countries agreed to give 0.7% of their GNI (Gross National Income) as official international development aid, annually. After over 40 years of commitments and promises, our government last week finally reached this target. This was a major and most welcome achievement. It now has further opportunities this year to work with other governments at tomorrow’s United Nations talks in Bali and the G8 summit in June to considerably improve the situations that many of the world’s poorest face. It’s vitally important that pressure is applied through campaigning such as Enough Food for Everyone IF to ensure David Cameron and other leaders don’t waste these precious chances:
David Cameron and other leaders working on a global anti-poverty plan should ensure it helps poor countries collect the tax billions they are owed, Christian Aid urges today, on the eve of new talks on the plan in Bali, Indonesia.
A new briefing from the charity highlights how so far, very little attention has been given to the question of how to pay for the sustainable development plan that will replace the Millennium Development Goals after 2015.
‘Tax is a crucial part of the answer,’ said Helen Dennis, Senior Adviser on Poverty and Inequality at Christian Aid. ‘Successful action against tax avoidance and evasion could generate more money than rich countries give in aid every year and that, in turn, could make a dramatic difference to the lives of women and men living in poverty.’
She added: ‘Christian Aid estimates that tax dodging by multinationals alone costs poor countries $160 billion a year. That’s why it’s vital that David Cameron and the other leaders who are working on the world’s new development plan ensure that it includes effective action to help poor countries collect the taxes they are owed.’
‘The Prime Minister has already made it clear that he wants the G8 Summit in Northern Ireland this year to make progress against the international problem of tax dodging. It makes sense for him to ensure that it is also part of the conversations in Bali.’
The new briefing, Tax & The Post-2015 Agenda, argues that the global plan should require all countries to help create a global financial system which serves ordinary people – not just the most wealthy and powerful.
‘Good governance is in no way a ‘developing world problem’,’ it says. ‘If you dig deep, it becomes clear that corruption and tax evasion are often facilitated by service providers such as banks and lawyers based in the global North.
‘We believe a post-2015 development framework should also stimulate better global governance and require both individual countries and multilaterals such as the G20 to take steps in support of a more transparent financial system.’
Christian Aid is publishing its briefing just days before the opening of the final round of consultations on the new sustainable development plan in Bali, Indonesia. David Cameron was expected to attend the talks because he is a co-chair of the United Nations’ High Level Panel on what should follow the MDGs but it turns out that he will not be present after all.
Ms Dennis added: ‘It is disappointing that David Cameron will not attend this critical meeting but we hope that he will keep raising the subject of tax over the coming months, as the important report on the post-2015 plan is drafted.”
The new briefing points out that as well as helping to fund poverty reduction, tax systems can help tackle inequality, by redistributing money from richer to poorer people. There is widespread agreement across governments, businesses and civil society organisations that any new global development plan should also help reduce inequality.
It concludes by suggesting how tax could be integrated into a new global development plan. For instance, it shows how a revised goal on ‘partnership for development’ could be underpinned by commitments made by governments to:
· Financial transparency and information exchange
· Not to undermine another country’s tax revenue base
· To prioritise development concerns in international tax treaties and negotiations
· To universal participation in negotiations on changing global tax rules
In relation to a goal on inequality, the briefing says: ‘A target to reduce income inequality could easily fit under a number of headings including ‘inclusive growth’. The most important thing is that this is captured within a new framework and regarded as absolutely central to the pursuit of sustainable development.