/ News from Bristol East
/ Tax dodging hurts everyone – Kerry McCarthy MP
Kerry McCarthy MP and Labour mayoral candidate Marvin Rees have joined up with Christian Aid and Church Action to raise awareness of the impact tax dodging has on the poor. Meeting with campaigners on the Tax Justice Bus, Kerry and Marvin discussed the detrimental impact tax dodging is having upon efforts to eradicate poverty both in the UK and in developing countries. According to a recent study, tax avoidance and tax evasion is costing the UK taxpayer around £35 billion annually and in the developing world £160 billion is being hidden from tax authorities – funds which could be used to help the world’s poor.
Tax avoidance is a big business in the UK with 98 out of the UK’s 100 largest corporations operating subsidiary companies in offshore tax havens. The City of London, the Channel Islands and the Cayman Islands (a Crown Dependency) all play key roles in promoting tax secrecy and tax avoidance, allowing some wealthy individuals and companies to channel money out of the UK economy. In the developing world, the OECD estimates that the money lost by developing countries to tax havens is up to three times the global aid budget, while another report calculates the cumulative value of the capital that has flowed out of developing economies since the 1970s would be more than enough to pay off their debts to the rest of the world.
Kerry said: “Whether you live in Britain or Botswana, tax avoidance and tax evasion by big multinational companies and wealthy individuals affects us all and it must be stopped. At this time of austerity, when vital public services are being cut, it is difficult to imagine how 98 out of the UK’s 100 largest corporations can justify avoiding paying their tax.
“Tax dodging is both a national and international problem that not only harms the taxpayer in Britain, but also prevents developing countries from working their way out of poverty and ending their dependency of foreign aid. Countries that are trying to reduce their dependency on foreign aid are having their efforts undermined by multinational businesses which are using tax havens to avoid paying taxes. This means developing countries are unable to reinvest the funds they should be collecting from these businesses in vital projects, to support their people and generate further economic growth.
“The aim to make poverty history both in the UK and in developing countries can only be achieved if there is international action to close tax havens and close tax loopholes. I am pleased to say that both Marvin and I have signed a letter to the Prime Minister calling on him to use his Presidency of the G8 in 2013 to put the issue of tax transparency on the global agenda and to take action to tackle this problem.”