Each year the poorest countries in the world lose out on $100 billion of vital funds because companies use tax havens to avoid paying their fair share. We believe it’s a scandal and a form of corruption that’s making extreme inequality worse.
Last night, the government accepted a legal amendment that gets us one step closer to requiring Britain’s biggest companies to publish details of what profits they make and what taxes they pay in every country in which they operate. Supported by members of the influential Public Accounts Committee, Caroline Flint MP proposed the amendment which gives the Treasury the power to require large multinationals with a substantial presence in the UK to publish what revenues are earned in which nation and what taxes they pay. Public country-by-country reporting is already
government policy, but the proposed amendment – dubbed the #ShowMeTheMoney Amendment – moves us one step closer to making policy a reality and injects more urgency for the Government to move forward on this agenda.
Bringing businesses into the open will be of enormous benefit to poorer countries. Public country-by-country reporting will benefit the governments and campaigners of poorer countries who can use the information provided rather than needing to request tax information from other authorities.
Public country-by-country reporting makes it easier for governments to collect the tax money to spend on schools and hospitals. When corporations can shrug off the laws and rules of countries where they do business, there is a real cost to poor countries in lost tax revenue. If developing countries got their fair share of tax, poor countries would not be consistently losing out on much needed revenue to help fund medicines and midwives, textbooks and teachers.
It is encouraging to see cross-party agreement that transparency is an essential weapon in the fight against tax dodging. Flint’s first attempt to pass the amendment back three months ago was backed by eight parliamentary parties, but fell by only 22 votes. In coalition with other charities such as ActionAid and Christian Aid, Oxfam has been fighting for the #ShowMeTheMoney amendment at every turn. Today’s victory is a victory for campaigning.
It should be noted that last night wasn’t a total victory for tax justice. Scotland has become a destination of choice for those seeking to launder cash and keep their deals secret. In the cases highlighted so far, such as in this Herald Scotland and BBC coverage, partners in Scottish Limited Partnerships are often companies based overseas in countries such as the Seychelles or British
Virgin Islands that don’t require their owners to be made public. Oxfam Scotland has been campaigning for an end to the abuse of rules governing Scottish Limited Partnerships (SLPs) and supported an MP’s proposal last night to review the role they may have in helping tax dodging. Oxfam Scotland are also seeking cross party support from Scotland’s political leaders to bring about change in this area.
Still, the tide of opinion is moving towards openness. We now have a measure that could shine a light on the practice of tax avoidance by Britain’s biggest companies, which should also increase confidence in the tax system more widely and advance the fairness principle. However, while tax campaigners have achieved a big win together, there is so much more to do. We saw in the Panama Papers just how well organised the tax-dodging industry is. The fight to stop profits disappearing into tax havens goes on.
Show me the money event in parliament, June 2016. Credit: Fair Tax Mark