Tax dodging scandal continues to hit world’s hungry, says agency

£1.4 billion in illicit flows will be sucked from developing countries into tax havens during the two days of the G8 summit depriving poor countries of the resources they need to tackle hunger, the Enough Food For Everyone IF campaign warned today.

G8 leaders need to take urgent action to fulfil David Cameron’s pledge that the summit starting today will clampdown on tax dodging in poor countries at a time when 1 in 8 people in the world do not have enough to eat.

The £1.4bn flowing illicitly into tax havens would be enough to help 2.5 million farmers in Indonesia provide food for themselves and their families.

Sally Copley,

, spokesperson, said: “David Cameron’s G8 will be judged on whether he delivers his promise to make tax dodgers ‘wake up and smell the coffee’. There remains a real danger that the deal could end up as a messy compromise full of half measures that only deliver for a handful of rich countries.,

“Sneaking money out of the poorest countries is tantamount to taking food out of the mouths of hungry families.  The sheer scale of the money flowing out of poor countries demands G8 action in the interests of the poor.”

There have been hopeful signs in the lead-up to the summit with David Cameron making real progress in persuading UK tax havens to sign up to a multilateral convention that will allow poor countries greater access to the information they need to collect the tax they are owed. If the Prime Minister’s support for public registries translates into concrete action they would help shine light on the activities of the ‘phantom companies’ routinely used to avoid tax – but to do so they must be public immediately not years down the line. He must now urgently get other G8 countries on board and put poor countries at the heart of the deal from the beginning.

The IF campaign held a photo opportunity with the ‘G8 Big Heads’ in chef’s outfits in Belfast on Sunday to draw attention for the need for urgent action on tax and land grabs to tackle hunger.

Copley said: “The ingredients for a G8 deal to tackle tax avoidance are well known - agreement to share information with poor countries and public registers that allow tax authorities to trace assets’ real owners and shed light on dodgy deals. With malnutrition the biggest killer of children around the world, we cannot afford to wait any longer for the G8 to cook up a deal.”

The campaign is also calling for action to tackle land grabs. During the summit, land greater than the size of Belfast will be sold off to foreign investors.

Copley said: “Poor communities need protection against having their land grabbed from under their feet. The G8 should change the rules so that so that no company can take land from poor families without facing repercussions.”

Notes:

Tax

Global Financial Integrity estimates that 44.2% of illicit financial flows are absorbed by offshore tax havens, which is the latest analysis available. This estimate was based on a list of 46 tax haven jurisdictions. (Global Financial Integrity, The Absorption of Illicit Financial Flows from Developing Countries: 2002-2006: http://www.gfintegrity.org/storage/gfip/documents/reports/absorption_of_illicit_flows_web.pdf.
The 48-hour figure was calculated on estimates of illicit financial flows for the year 2012, which is $892 billion. (Global Financial Integrity: Illicit Financial Flows from Developing Countries: 2001-2010:  http://iff.gfintegrity.org/iff2012/2012report.html. We divided this by 365 then multiplied by two to get to the 48 hour figure.
This figure was then multiplied by the percentage absorbed by offshore tax havens (44.2%) to arrive at the $2.2 billion. 

The IF campaign is calling on the G8 to ensure poor countries can access the information they need to collect tax in two ways:

- members’ own tax havens should sign up to the Multilateral Convention on Mutual Administrative Assistance in Tax Matters, and

- by making sure any new multilateral tax information exchange deal (such as FATCA, the Foreign Account Tax Compliance Act) includes developing countries. 

Land

Belfast covers an area of 11,482 hectares [Belfast City Council]. Between 2000 and 2013, concluded land deals by foreign investors (for all purposes) covered a land area of 33 million hectares (According to the Land Matrix Partnership (http://landmatrix.org, downloaded 10 June), or 13,900 hectares every two days. This is equivalent to 1.2 times the area of Belfast being acquired every two days.

Secretive land investments mean vulnerable communities are at risk of losing their homes and the farmlands they need to grow food, without compensation and often violently. Already, G8 companies and investors have bought land in developing countries more than the size of the whole of Ireland since the year 2000 - land could grow enough food for 96 million people.

The G8 is being urged to tackle land grabs by supporting the UN Voluntary Guidelines, which would protect poor communities’ land rights, and establish a Land Transparency Initiative (LTI), where investors would share details on all their land deals. The G8 can start this by regulating all companies it is linked to and ensuring that affected communities are involved and heard in the negotiations.

 

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