Oxfam fights for stronger tax laws
Oxfam is urging world leaders at the G20 to crack down on tax havens, saying poorer countries are losing $100 billion a year through tax avoidance.
It’s expected that an announcement will be made this week on a strategy for countries that are not members of the G20 or OECD to become more involved in global tax reform.
It is hoped there will be a commitment to crack down on companies that use profit shifting and other accounting tricks to avoid or evade tax.
Oxfam Australia chief Dr Helen Szoke, says tightening governance of the global tax system is important for addressing inequality.
An Oxfam report shows the use of tax havens and tax-dodging by multinational corporations is costing poorer countries $US100 billion each year.
The report, Turn the Tide, also shows the total wealth among G20 countries increased by $US17 trillion since the Australian government took over the presidency in December 2013.
During this time, the richest one per cent of people in the G20 captured a staggering $US6.2 trillion of the new wealth.
But the so-called road map to ‘upgrade’ the involvement of poorer nations, Dr Szoke says, still fails to reconcile that governments representing a third of the world’s population are being denied an equal say.
Dr Szoke said key issues that must be addressed include tax competition between countries; where poor countries reduce their tax rate to attract foreign investment, and the question of where profits are taxed – where a country is headquartered or where it makes its profits.
Citing the example of Sierra Leone, Dr Szoke said that in 2012, tax incentives for multinationals operating in the poor west African country were equivalent to 59 per cent of the country’s entire budget, and more than eight times the government’s spending on health.
Dr Szoke said the Ebola crisis, which has killed some 5,000 people, mostly in Sierra Leone, Guinea and Liberia, where public health infrastructure is poor or non-existent, was a vivid example of the role of growing social and economic inequality.
