By Anne Ryan – Oxfam Constituency Campaigner 

At a time when the European Commission has just ordered Apple to repay €13 billion over a ‘sweetheart’ tax deal, how long must it take for governments to take action on tax loopholes? There could be no better evidence that we need international standards to avoid big companies racing to the bottom!


Currently, rich individuals and multi-national companies can choose whether to pay their fair share of tax – and perhaps not surprisingly, many of them choose not to pay. Instead they spend vast sums of money employing highly skilled lawyers and accountants moving their money out of the reach of the tax authorities.

 

As citizens we understand why we pay tax – to pay for a decent society. We pay for the roads we drive on, for the schools we attend, the hospitals, the fire service, the army and all the other public services that make our lives possible. High net worth individuals – the 1% – or just really, really, rich people do not live in this country because they like the weather – they live here for the benefits of British society – benefits that we all pay for.

 

Multinational companies also take advantage of ‘tax planning’ with several large companies cited by Ethical Consumer as prime tax dodgers.

 

This is the problem we face in the UK. Tax avoidance is an issue that governments are reluctant to tackle as they believe they are in a competition to maintain an advantage against other governments in a fiscal race to the bottom. And this is why international action must be taken, so governments are not forced to penalise their citizens for the needs of the rich.

 

In developing countries, there is an even more insidious form of tax dodging, where nations rich in natural resources are exploited often supported by corrupt governments. Many of the world’s poorest actually live in countries containing valuable raw materials, but see none of the profits. Oil, minerals and foodstuffs are extracted and processed with the financial benefits accruing to multinational companies based in western countries- with their accountants and lawyers working to preserve their tax advantages.

 

The Panama Papers have shown the extent of tax dodging by individuals and companies. It is time for governments to take back control, to act internationally, and to construct a fair tax system which can fund the kinds of equitable societies in which we want to live.

Disclaimer: Views are bloggers own and do not necessarily reflect those of Oxfam.

You can learn more about our tax campaigning here.


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