RESULTS in Belfast in the run-up to the G8
As I travelled to Belfast this morning I reflected on what has been a busy week for those working to combat the scourge of undernutrition across the world. Last Saturday the UK government hosted a ‘Nutrition for Growth’ summit, where donors pledged up to $4.1 billion to tackle global malnutrition. Today the government hosts a 2nd summit, this time on Tax, Transparency & Trade. And on Monday the G8 Leaders meet here in Northern Ireland. But what have discussions on Tax got to do with our work fighting undernutrition?
Firstly we wholeheartedly welcome the donor pledges made for Nutrition at last week’s Summit. But they fall far short of the total estimated $10 bn per year that is needed to implement a package of ten key nutrition interventions. That’s why this weeks dis
cussions are so important on ending tax dodging by companies based in developing countries. The revenue lost from global tax avoidance could pay many times over the sums needed to achieve zero hunger.
The OECD estimates that developing countries lose three times more to tax havens than they receive in aid each year. Using tax havens is not illegal or proof of tax avoidance, but allows companies to dramatically lower the taxes they pay, move them to different jurisdictions (usually, away from the developing world) and keep financial transactions opaque.
The UK is currently responsible for one in five tax havens globally – more than any other country. Recent research by ActionAid has demonstrated the heavy involvement
of British companies in tax haven-use with 98 of FTSE 100 companies using tax havens. G8 countries are collectively responsible for 40 per cent of tax havens.
Pressure from development agencies united in the Enough Food for Everyone IF campaign has already led to positive movement in the financial sector. For example Margaret Hodge, chair of the influential Public Accounts Committee in the UK, has welcomed an initiative to rank Britain’s retailers by the tax they pay and their use of tax havens. The Fair Tax Campaign, created by the tax accountant Richard Murphy, has awarded 25 retailers a score between 0 and 15; those scoring more than 12 earn a “fair tax mark”. The companies that come top are those that pay all the tax that is expected from them.
Certain well-known global companies come bottom of the league, due to alleged use of tax havens, failure to pay “an acceptable rate of tax” on profits and not reporting financial figures on a country-by-country basis. (Unsurprisingly, these firms disputed the campaign’s figures, methodology and conclusions, many stating that they operate completely within the law and pay all tax that is due – which is very likely true, but unhelpful.)
So this is what takes me to Belfast this weekend as the
next stage of the IF campaign puts pressure on G8 leaders to agree key improvements in the global tax system. I believe essential funds for Nutrition programmes and other development initiatives can be freed up by stopping wealth being siphoned out of the poorest countries into tax havens. G8 leaders must deliver on their promise to “call time” on tax havens for the benefit of all countries, including the poorest.
The views and opinions expressed here are those of the author and do not necessarily reflect the views of RESULTS UK.