G20 finance ministers urged to end tax loopholes
By Liz Stephens
G20 finance ministers meeting in London today have been urged to prioritise reforms to close tax dodges for international companies.
Charities such as Christian Aid are pushing for new international rules to force tax havens to reveal automatically the identities of businesses and individuals holding funds offshore, and provide details of the amounts involved.
They have called on Alistair Darling, as host of the conference, to take a lead in championing the interests of poor countries by spearheading the closure of such tax loopholes – which it says cheat developing countries out of £160 billion annually.
However, the move will put the government in an awkward position as it recently performed a quiet U-turn on party funding laws which would have prevented wealthy tax exiles – and those who operate from tax havens and refuse to provide details of their taxes – from funding the forthcoming general election campaign.
The electoral commission confirmed last month that the rules would not be enforced until the summer of 2010.
The new law would have prevented the Conservatives’ most important donor, Lord Ashcroft, from giving any more than £7,500 funding to the party. The peer has refused to declare whether he pays tax in the UK or in Belize.
‘Non-dom’ Labour donors such as Lakshmi Mittal would also be inconvenienced.
Dr David McNair, senior economic justice adviser at Christian Aid said: “In a communiqué earlier this year G20 countries committed themselves to proposing measures to counter tax evasion that would benefit everyone, not just rich countries.
“As the host of this meeting Alastair Darling is in a unique position to lead his counterparts in delivering on the undertaking that they gave. Reform is vital.”
Finance ministers are due to discuss a report from the Organisation for Economic Co-Operation and Development (OECD) on improving standards of tax transparency.
The OECD report will recommend the use of Tax Information Exchange Agreements (TIEAs) to force tax havens to share information with a minimum of 12 countries.
However campaigners say that TIEAs are “bureaucratic” and “riddled with get out clauses”.
Yesterday the OECD said that the UK would lag behind the rest of the world in recovering from the global recession, however the IMF said it expected to see Britain experiencing growth next year.
