IT IS HARD to say without
resorting to cliché, but there has never been a more exciting time
to be a tax-justice campaigner. In the UK, the public, the media,
and politicians are now wide awake to the fact that some very
large, well-known, and successful companies here are paying
extraordinarily little tax. When public funds are so short, they
are understandably shocked, even when it seems that the companies
may have obeyed the letter of the law. There is tremendous pressure
for change.
But what is happening on
the international front is potentially much more transformational.
Along with others, Christian Aid has been campaigning for tax
justice since 2008, and we have worked hard to highlight that
tax-dodging is a problem for poor countries, too. They urgently
need to collect more of the tax that is owed them, in order to
overcome poverty and aid-dependence.
Now it seems as though
our message is getting through to some powerful people. In his
speech in Davos last month, David Cameron gave his clearest-ever
recognition of the fact that poor countries face a fierce struggle
to collect the tax revenues that their people need so badly. He
also made it plain that the UK will use its G8 chairmanship this
year to push for international action on tax evasion, aggressive
tax-avoidance, and financial secrecy.
OF COURSE, words are not
enough, even from prime ministers. Only changes in laws, and in
corporate and individual behaviour, will produce a better world, in
which the financially powerful fulfil their responsibilities to the
rest of society. Obeying the letter of the law is clearly one of
these, but from a moral perspective, the powerful also have a
responsibility to contribute their fair share - and so to comply
with the spirit of the law as well.
There are years of hard
work ahead of us, but also reasons to be optimistic. In the latest
development, more than 100 organisations are working together on
the Enough Food for Everyone IF Campaign (
News, 25 January). Christian Aid, CAFOD, Tearfund, Islamic
Relief, and the Jewish charity WJR are among them.
IF starts from the
terrible fact that although there is enough food in the world for
everyone, almost 870 million people are hungry, according to the
UN's Food and Agriculture Organisation. The campaign is asking the
UK and other governments to act on four fronts. They are: land
grabs in poor countries (in which investors acquire large tracts of
land, often at the expense of local people living in poverty); aid
for poor countries; transparency from both governments and
companies; and, crucially, corporate tax-dodging against poor
countries.
I AM passionate about tax
and transparency, because while aid is important, it alone cannot
solve hunger. There is not - and will not ever be - enough of it,
never mind the undesirability of countries' being dependent on, and
beholden to, donors. Tax, however, has staggering potential:
Christian Aid research suggests that developing countries lose
perhaps $160 billion a year in revenues through corporate
tax-dodging.
This is a scandal. The IF
campaign is calling for two particular changes that would help.
First, we want the British Government to use its Budget in March to
require UK companies to reveal their use of tax-avoidance schemes
that affect developing countries. We also want the UK to help those
countries to recover any unpaid tax that is due.
Second, we are asking the
UK to use its power when chairing the G8 to create a new
international convention on tax transparency, of which G8 countries
would be the first signatories. The convention would commit
countries to creating public registries of who owns companies,
trusts, and foundations. It would not allow people to hide behind
anonymous shell companies in tax havens, as they do at present.
The G8 should also press
tax havens to share more information with developing countries. In
the past year, G8 countries have been increasingly effective at
forcing havens to open to them; now we need the G8 to use that
power to make sure all countries get the same benefit.
THE result would be a
progressive ending of financial secrecy across the world, leaving
tax-dodgers and others with money to hide with fewer and fewer
hiding places. Both rich and poor countries would benefit.
Having worked in
law-enforcement in financial services myself, I have some idea of
how such a new convention could help. If you are trying to trace
money across continents, then you need to know who is moving what
to where, and who owns what. You also need the co-operation of your
opposite numbers in other jurisdictions.
Critics may say: so what
if poor countries' governments do collect more of the tax that
they're owed - might they spend it on weapons, or siphon off some
for their private gain?
Clearly, ending tax-haven
secrecy will make it harder for the corrupt to hide money stolen
from public funds. But to encourage governments to spend public
money well, there must also be transparency around the payments
that they are receiving from companies, and around how they spend
tax revenues. The IF campaign is also promoting transparency.
Such public
accountability, supported by a vibrant free media and civil
society, and respect for free speech, is the best protection that
citizens across the world have against governments misspending
public money.
There are no guarantees
of government wisdom and propriety, anywhere in the world. But to
argue that we should therefore abandon work to make companies pay
their taxes is a counsel of despair, and an acceptance of a planet
deeply scarred by suffering and injustice. The world can do
dramatically better than it does today. I urge you to join the IF
campaign.
Loretta Minghella is the director of Christian Aid (www.christianaid.org.uk; www.enoughfoodif.org).