UK aid money going to known tax havens
Millions of pounds of British aid money could have been given to known tax havens to fund public services
The UK paid out £45m to 13 countries on the European Commission’s tax haven “blacklist” in 2013, according to a report in The Independent.
The blacklisted countries that received British aid are Anguilla, Antigua and Barbuda, Belize, Grenada, Liberia, Maldives, Marshall Islands, Mauritius, Montserrat, Panama, Seychelles, St. Vincent and Grenadines and Vanuatu.
Some of the countries have such high poverty levels that they qualify for substantial UK development grants, despite the fact that they are often used by multinationals to avoid paying UK taxes.
According to the report, Britain’s aid money has been used to build an airport in Montserrat, and set aside to pay for roads and ports in Belize, Antigua and Barbuda, and St Vincent and the Grenadines. The UK has also helped fund health services in Liberia.
The investigation also found that more than £1.8m has been sent to Anguilla, which has no income tax, no capital gains tax or corporation tax.
Diarmid O’Sullivan, ActionAid tax justice policy advisor told economia, “At the G8 in 2013 David Cameron promised to tackle tax avoidance. This report has shown once again that there is a lot more to do if the corrosive effects of tax havens are to be addressed.
“The government needs to keep its promise to act on tax havens, and UK overseas territories in particular, which facilitate massive corporate tax avoidance. The IMF estimates that tax avoidance by multinationals costs developing countries $200bn a year, with tax havens often the conduit of choice.
“We need a fairer global tax system which tackles tax havens, supports women and children and helps developing countries to find a sustainable route out of poverty.”
The European Commission published the list of the top 30 international tax havens in June as part of a crackdown on multinational companies trying to avoid paying tax in the 28-nation bloc. The lists consists of countries or territories that feature on at least 10 member states’ blacklists.
Christian Aid’s senior economic justice adviser Joseph Stead raised concerns that nearly a quarter of the countries featured on the list are either British overseas territories or crown dependencies.
He said in a statement, “Despite the UK’s regular insistence that it leads the global fight against tax dodging and corruption, it is notable that over 20% of the tax havens on it are ultimately controlled by the UK.”
Although the UK has signed deals with some of the blacklisted countries to ensure that full rates of tax are paid, the Commission still regards them as tax havens because of their treatment of other countries.