This week, activists united across Europe to blow giant whistles on tax-dodging. Restless campaigners were out in force, calling the UK government to support a law to make companies publish where they do business and where they pay tax. Our Campaign Coordinator Rachel Walker explains why this simple idea could transform developing countries.
One year ago today, a journalist and a junior accountant blew the whistle on hundreds of multinationals and their secret tax deals with Luxembourg. This news, referred to as the #LuxLeaks corporate tax scandal, revealed how companies ranging from Ikea to Pepsi funnelled money through Luxembourg to lower their tax bills to as little as one per cent. A year later and while the whistleblowers face criminal charges, the world’s largest multinational corporations are still avoiding paying billions of dollars of tax.
Citizens and decision-makers should not have to rely on individual whistleblowers risking their freedom in order to reveal the extent to which business escape paying their fair share. It should be publicly available. All countries are affected by rigged tax rules but developing countries lose billions a year to tax dodging, robbing governments of billions which could be spent on poverty-busting services like schools and hospitals.
But there is a solution – something that Restless Development’s network of UK campaigners called for in the Tax Dodging Bill campaign in the run up to the General Election. Country-by-country reporting would create far greater transparency in the global tax system, Its introduction would make information available to the public so that we can hold companies and governments to account and stop systemic tax dodging. Only with public country-by-country reporting will developing countries be able to access the information they need to collect a fair share of corporate taxes.
This week the European Union debates if all companies registered in the EU should be legally required to publish where they do business and where they pay taxes.
‘The European Parliament has proposed public country by country reporting to allow public scrutiny on where corporate profits are made and where they should be taxed.’
It is a simple idea. And one which we know has been echoed in the UK. Earlier this year, a massive campaign success made possible by the Restless Taxivists, was the Conservative party’s, now the UK Government, commitment to country-by-country reporting. A key recommendation within the recently released BEPS (Base Erosion Profit Shifting) report on tackling tax dodging by the OECD (organisation for economic cooperation with 34 of the most economically developed nations) was also country-by-country reporting.