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Heat turned up on tax schemes

29 June 2012

by a staff reporter


Apologised: Jimmy Carr on stage at a charity comedy night in April

Apologised: Jimmy Carr on stage at a charity comedy night in April

LOOPHOLES that permit aggressive tax-avoidance schemes are depriving developing countries of about $160 billion (£102 billion) every year, a charity has said.

Christian Aid has called for the urgent closure of such "morally reprehensible" tax loopholes, in the wake of the comedian Jimmy Carr's apology, this week, for using a tax-avoidance scheme.

Mr Carr reportedly used a legal scheme, based in Jersey, which allowed him to pay income tax as low as one per cent on his earnings.

He was criticised by David Cameron, who described the scheme as "morally wrong". Mr Carr later apologised and said that he had made a "terrible error of judgement". He pledged to conduct his financial affairs more responsibly in future.

Christian Aid has called on corpora­tions to echo this pledge. It estimates that multinationals trading in the developing world deprive developing countries of $160 billion in lost tax revenues every year by using tax havens to minimise their liability.

Christian Aid's senior economic-justice adviser, Joseph Stead, said that corporations using tax-haven secrecy to minimise their tax should recognise that public feeling is increasingly turning against such strategies.

"The Government has a responsibility to close the loopholes that allow this kind of activity to go unchecked, particularly when it allows corporations in rich countries to have such a damaging impact on people's lives in poorer countries. The need is urgent and must be quickly met."

The charity, together with Church Action on Poverty (CAP), and the General Secretaries of the Methodist Church, the United Reformed Church, and the Baptist Union of Great Britain, sent a letter to The Times, in which they criticised tax avoidance as an injustice that kept some people poor while others got richer.

Christian Aid and CAP will launch a seven-week "tax-justice" bus tour this au­tumn, with the message that tax-avoidance costs lives, as it deprives the education, health, and welfare services of money.

The Bishop of Durham, the Rt Revd Justin Welby, called on the Government this week to act to stop the growing inequality between the wages of workers and executives. A failure to act "would prove dangerous to social cohesion", he told the House of Lords.

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