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09 January 2015

Tax to tackle poverty

Tax to tackle poverty

Image courtesy of Christian Aid

As part of its tax campaign this New Year Christian Aid is urging Governments to commit to a resolution that could really make a difference: to collect the taxes needed to tackle poverty and create a better world.

"Tax pays for the services we all need, like hospitals, schools, roads and policing," said Toby Quantrill, the charity's principal adviser on economic justice.

"Tax revenues can make the difference between dignity and destitution and, especially in developing countries, between life and death. A well-designed, effective, tax system can help to close the widening gap between rich and poor. 

"But all over the world governments are struggling to collect enough tax to fund decent public services, while multinational companies dodge billions of pounds in tax.

"So we're urging governments to make a New Year's resolution for 2015 and beyond, to take action to ensure companies are paying their fair share of tax in all the countries where they operate. It is time to rebalance the rules in favour of people everywhere."

In order to collect more tax from multinationals, Christian Aid are asking governments to do the following to sweep away the financial secrecy that sustains tax dodging:

-Require multinationals to publicly reveal separate economic and financial details (such as numbers of employees, profits made and taxes paid) for every country in which they operate, making tax dodging easier to spot.

-Require all companies to reveal who really owns and controls them and put the information in national, public registers. This would help track down criminals behind tax evasion, money laundering, corruption, terrorist financing and other problems.

-Include developing countries as full participants in the OECD-run 'BEPS' project to catch up with multinational tax dodgers. In addition, develop new processes which include poor countries on an equal basis from the start, to tackle the problems of greatest concern to poor countries. "At the moment it seems that multinationals have more influence over the global tax system than developing countries, which is pretty terrifying," said Mr Quantrill

Christian Aid's tax campaign .aims to encourage tax justice. Last year the campaign helped make tax a key issue at the G8 summit, and following on from this the campaign saw a new law announced that will mean UK companies must publicly disclose their real owners. The hope now is to see the European Union and the UK's overseas territories adopt similar measures.