Of all the measures that could be taken to eliminate world poverty, stopping tax evasion may be the single most effective option. Inadequate tax revenues mean developing countries are unable to provide the quality of education, health, public infrastructure and social services that their citizens deserve.
The One Campaign has coined tax evasion a “trillion dollar scandal” – estimating that at least US $1 trillion is being taken out of developing countries each year through money laundering, tax evasion and embezzlement.
Here are 10 shocking statistics about tax evasion accompanied by short home-made video clips and 5 ways you can act now to stop this “trillion dollar scandal”:
1) The OECD has estimated that developing countries lose three times more to tax havens than they receive in foreign aid each year.
2) Stopping tax evasion and curbing corruption in Sub-Saharan Africa alone could:
pay for an additional half-million primary school teachers,
educate an addition 10 million children a year (providing all out-of-school children in 16 African countries with an education),
provide antiretroviral drugs for over 11 million people living with HIV/AIDs
and pay for 165 million vaccines.
3) The use of tax havens is embedded in the structure of nearly all of Britain’s biggest companies. 98 out of the 100 companies listed on the London Stock Exchange use tax havens. 82 of these operate in developing countries.
4) ActionAid discovered that Grolsch beer’s owner, SAB Miller has deprived developing countries of up to $20 million in tax – enough to send 250,000 children to school.
5) Glencore, a mining company, single-handedly cost Zambia £76 million through dodging tax – far more than the £59 million Zambia receives in UK aid each year.
“Through tax evasion and avoidance mining companies are depriving us of social and economic benefits that are rightly ours” – Savior Mwambwa from the Centre of Trade Policy and Development in Zambia
6) Associated British foods, owners of household brands: Kingsmill, Raivita and SilverSpoon, have paid virtually no corporation tax in Zambia since 2007. This has lost Zambia an estimated $27 million – enough to send 48,000 children to school.
7) Barclays, the largest UK bank in Africa, channels some of its business through tax havens, enabling its clients to avoid tax and consequently deprive poor countries of vital resources. In 2012, 471 of their subsidiaries were listed in tax havens.
8) State-owned mines in the Democratic Republic of Congo (DRC) were sold to anonymous “shell” companies in the Virgin Islands for an exceptionally low price – only to then be sold on at their market price to major listed companies. Such deals cost the DRC US$1.35 billion, which is twice the education and health budget of a country where 71% of the population lives below the poverty line.
9) While the World Bank has estimated corruption by government officials cost developing countries a significant US$30 billion per year- this is only 3% of the US$900 billion of public funds lost through tax evasion schemes by multinational companies.
10) The One campaign estimates that as many as 3.6 million deaths could be prevented each year in the world’s poorest countries if action is taken to end the secrecy that allows corruption and criminality to thrive and recovered revenues were invested in health systems.
When businesses do not pay their fair share in tax, they deny some of the world’s poorest people the quality of public services and livelihood they deserve.
ACT NOW, STOP TAX DODGING AND HELP END GLOBAL POVERTY:
Here are 5 ways you can help bring about tax justice:
ActionAid campaigners put immense pressure on Barclays to stop their aggressive promotion of tax havens in Africa. This led to Barclays Boss Antony Jenkins making a personal commitment to find common ground with ActionAid.
Nonetheless, it has been over 4 months and we have not yet seen any action.
Send a personal email to Antony Jenkins now to demand that the bank stop selling financial services to companies using tax havens to avoid taxes in Africa.
Murray Worthy, Tax Justice Campaign Manager at Action Aid reports “We are asking campaigners up and down the country to contact their local councillors and ask them to pass a motion against tax dodging. Next year is the general election in the UK. If we can get every council to pass a motion saying they support cracking down on the tax dodgers, we can send a powerful message to all the political parties that communities want change.”
Email your local councillors about the issue. And if you want to get more people involved: Host your own event with the support of ActionAid, and encourage your community to campaign for tax justice!
Christian Aid are calling for public registers of the real owners of companies. These would help uncover many of those who are dodging tax and participating in corrupt deals. It would hold them to account and ensure every country gets the money that is rightfully theirs.
In the UK the government has announced legislation to do this. Nonetheless it needs to be strengthened in order to make the register effective.