Demand overseas territories crack down on tax dodging shell firms, PM told
Charities remind Cameron of pledge to ‘continue to lead world on tax and transparency’ before meetings with leaders of overseas territories
Campaigners are urging David Cameron to use a meeting with leaders of Britain’s overseas territories this week to demand a crackdown on tax dodging, corruption and money laundering.
Leading charities, including Oxfam and ActionAid, have written to the prime minister to highlight the “murky” world of shell companies that set up in territories such as the British Virgin and Cayman Islands, thereby depriving developing countries of billions of dollars in tax revenues.
Before the government’s meetings with the heads of overseas territories in London on Tuesday and Wednesday, the 11 NGOs remind Cameron of his commitment to tackle the abuse of anonymous companies and his promise in the Tory’s election manifesto to “continue to lead the world on tax and transparency”.
The letter, seen by the Guardian, says: “The UK-linked overseas territories, including the British Virgin and Cayman Islands, are leading international suppliers of anonymity, enabling many to hide from the authorities, especially in the world’s poorest countries. Tax havens are not just facilitating tax dodging, they also facilitate corruption.”
The campaigners praise Cameron’s efforts to stop the UK’s property market from becoming a safe haven for corrupt money but they express disappointment about the lack of meaningful change on tax transparency in Britain’s overseas territories and crown dependencies.
“The truth about the real sources and owners of the vast sums of money flowing into these UK-linked jurisdictions remains as murky as ever. The failure of these territories to heed your 2013 call for ‘proper companies, proper taxes, proper rules’, is a national embarrassment and undermines UK leadership on this, and other fronts, in tackling global poverty and corruption,” says the letter, whose signatories also include the heads of Christian Aid and Transparency International UK.
Follow the money: inside the world’s tax havens
Cameron has repeatedly urged overseas territories to introduce central public registers of company ownership, so that law enforcement agencies can trace criminals behind firms that are currently anonymous. But his calls have met with resistance in some territories.
On the eve of the UK-hosted G8 summit in 2013, Cameron secured an agreement from Britain’s overseas territories and crown dependencies that they would sign up to a new clampdown on tax evasion. At the summit, he made improving international tax compliance a key issue. But his 10-point plan to tackle global tax evasion met a hostile reception from campaigners after he failed to persuade his G8 counterparts to make any new binding commitments.
In their letter, the NGOs tell Cameron that the failure of tax havens to heed his calls on transparency is cheating people in developing countries out of funding for hospitals, schools and roads.
The campaigners want overseas territories, which are self-governing but partially subject to UK law, to be upfront about who owns, controls and benefits from companies set up there and to provide publicly available central registries.
“Shining a light on the shadowy world of anonymous shell companies will help governments from Uganda to the UK claim what’s rightfully owed to them, and help citizens to hold governments to account for spending this money on vital public services,” the letter says.
The letter comes after Cameron accused some British overseas territories and crown dependencies of not doing enough to tackle tax evasion and money laundering. On a trip to the Caribbean in September, he told the Jamaican parliament that he was still not happy with the way some territories were resisting financial transparency, without naming any.