Cameron’s G8 tax plan lacks 'detail and deadlines’
Responding to the outcomes of the G8 summit, Murray Worthy, tax campaigner at the British anti-poverty charity War on Want, said: “If all of these promises become reality, this could have an enormous impact on tackling one of the greatest scandals of our time. But there is a long way to go and today all we have is a general statement of principles, with no detail and no deadlines.
“As always, the devil will be in the detail, and there is no detail here. Talk of stopping companies shifting profits to avoid taxes is a huge step forwards, but we have heard great promises from the world’s heads of state before – it is what they do that counts.
“Today’s announcement also stands in grim contrast to Cameron’s domestic policy on tax. He has failed to tackle Britain’s tax havens, made it easier for multinational companies to dodge tax and for rich people to evade taxes. Scoring political points on the international stage will not undo the huge damage he has done to the UK tax system.”
The G8 today announced that new rules would be put in place to disclose the real “beneficial” owners of companies, which until now have been able to hide their identities behind layers of secrecy, often using poor regulation in tax havens.
A comprehensive public register of the beneficial owners of companies and trusts would have been a serious blow to tax havens secrecy and represent a significant victory for tax and anti-corruption campaigners. However, the deal announced today fell short of what campaigners had demanded, by not committing countries to making information public, only sharing that information with other tax authorities.[1]
The G8 also announced agreement on new rules for automatically sharing information between countries’ tax authorities. However, the proposals included no detail on how tax havens would be forced to sign up to the deal.[2]
At the 2009 G20 summit, Gordon Brown famously hailed the “beginning of the end for tax havens”. But, one week after the summit, a “blacklist” of the world’s uncooperative tax havens – a crucial outcome of the summit – had no countries left on it. [3]
Many of the world's most significant tax havens are British, including overseas territories such as the Cayman Islands, Bermuda and British Virgin Islands, and the Crown Dependencies like Jersey, Guernsey and the Isle of Man. This weekend Cameron invited senior ministers from the overseas territories to sign a tax information-sharing treaty ahead of the G8 summit. However, campaigners have criticised the treaty for failing to tackle the jurisdictions’ financial secrecy. [4]
Campaigners have called on the British government to introduce legislation to abolish all of the UK’s tax havens, ending their jurisdictions secrecy, establishing rigorous financial regulation and making profits and wealth subject to effective taxes. [5]
Cameron’s domestic tax policy has come under heavy criticism from tax justice activists since the coalition government took power in 2010. In 2012, the government removed Britain’s main anti-tax haven rules, in a move set to cost the UK £1 billion a year and developing countries £4 billion a year.
In the same year the government signed a controversial deal with the Swiss government, which allowed Swiss banks to keep details of UK account holders secret and could end up losing Britain money. [6]
NOTES
2- The G8’s announcements are based on a report produced by the OECD for the summit today -http://www.oecd.org/ctp/exchange-of-tax-information/taxtransparency_G8report.pdf
3 – See http://eurodad.org/3595/
4- Experts have criticised the information sharing treaty for not requiring tax havens to share information automatically and for providing little incentive to comply with the terms of the deal. The treaty is also limited in only forcing jurisdictions to share information they already collect. This renders the agreement virtually meaningless for tax havens that refuse to collect key information on taxpayers.
For more information on the OECD Multilateral Convention on Mutual Administrative Assistance in Tax Matters see the Tax Justice Network briefing paper:
http://www.taxjustice.net/cms/upload/CoE-OECD-Convention-TJN-Briefing.pdf
5- The British government has acknowledged its full ability to enforce financial regulation on the UK’s tax havens. The Organisation for Economic Cooperation and Development noted in a 2012 report on implementing the Anti-Bribery Convention “the UK acknowledged that – from a constitutional perspective the UK has unlimited power to legislate for the OTs [Overseas Territories]”. http://www.oecd.org/daf/anti-bribery/UnitedKingdomphase3reportEN.pdf Page 51
6- TJN briefing on UK-Swiss tax deal http://www.taxjustice.net/cms/upload/pdf/TJN_1110_UK-%20%20Swiss_master.pdf
blog comments powered by Disqus
