'Tax is the new aid' - but will big four listen?
Thursday, 10 September 2009 4:45 PM
By Alex Stevenson
The big four accountancy firms are facing pressure to support international tax reforms - and help open up more money for developing countries than they currently receive in aid.
PriceWaterhouse Coopers, KPMG, Ernst & Young and Deloitte & Touche were the joint winners of the 'greatest potential for tax reform' gong in Christian Aid's Alternative Tax Awards 2009.
This morning, activists from Christian Aid handed the International Accounting Standards Board (IASB) the charity's Greatest Potential for Tax Reform award at their HQ in Cannon Street, London.
The big four play a significant role in influencing the IASB, which by backing country-by-country reporting could cut £160 billion of money lost to developing countries' coffers, Christian Aid insists.
"The big point of the awards is to highlight to the accountancy profession that currently tax dodging costs the developing world £160 billion a year - four times the cost of implementing the millennium development goals," Christian Aid's campaigns officer for economic justice, Andy Wilson, told politics.co.uk.
Multinational corporations and individuals are currently able, without breaking any laws, to dodge taxes through trade mispricing.
Country-by-country reporting could end this problem. Without it, Mr Wilson said, many countries were forced into taking out loans or taking aid because their tax coffers were insufficient.
"If we got the tax system right the developing countries would have more money to spend on health, education, pensions than we currently make available to them through aid," he added.
The British government has already indicated its support for country-by-country reporting, which would enable developing countries to see in which country a multinational operates and its name, financial performance and profits in each country.
The Treasury has taken its broad support for this reform to the G20 but Christian Aid believes the four companies which have a major influence on the IASB have the biggest potential impact.
The big four companies are not the only winners at this year's awards. The Department for International Development is the sole owner of CDC Group, which took the tax havens gong.
Serious about politics?
Dedicate one year of your life to getting to the heart of current issues in global politics. Our courses allow you to specialise in development and policy-making, international relations, and political journalism and communications.
Newsletter sign up