Poverty is an outrage against humanity. It robs people ofdignity, freedom and hope, of power over their own lives. Christian Aid, 2012
It is estimated that $160 billion a year is denied to developing countries because of tax dodging.Think about what all that money could be spenton!
Developing countries are losing morefrom tax dodging than they receive in aid (from governments of rich countries and from charities like OXFAM) each year.
First, a bit about tax ......• We all pay tax – income tax, VAT (value-added tax) on most things we buy, road tax, council tax etc. Most of this tax goes to central government, some to local government (ie Harrow council). Then it gets spent on things like schools, hospitals, defence, social services etc.• Like individuals, companies also pay tax (corporation tax) on their profits. This also goes to the government to spent on schools, hospitals etc.
So why aren’t poor countries getting the tax income they should?
......Because lots of big companies that operate in poor countries are legally and illegally using tax havens.
A tax haven has.....•Very low or zero levels of tax.•High levels of financial secrecy.
How does it work?• A parent company creates a subsidiary company (a linked but separate company) in a tax haven that collects profits made by the company in other countries. Other countries may include Britain but often include developing countries in Asia and Africa where products like clothes and electronic equipment is made.• The tax haven charges little or no tax on the profits.• The identity and bank accounts of the parent and subsidiary companies can be kept secret so the true amount of profits and dodged tax stays hidden.
“There’s a building in the CaymanIslands that houses supposedly 12,000 US corporations. That’s either the biggest building in the world or the biggest tax scam in the world.” Barack Obama, US President
There are tax havens in ....• Europe (including Lichtenstein, Luxembourg and Switzerland),• islands linked to Britain’s former empire (including the Bahamas, Dubai, the Cayman Islands and Jersey) and• countries in the US zone of influence (including the American Virgin Islands).
What can we do?A group of organisations across the world includingChristian Aid and ActionAid in the UK are calling onworld leaders in the G20 (20 of the world’s mostpowerful economies) to end tax haven secrecy by•requiring tax information all over the world to betransparent.•Requiring multi national companies to report on allprofits made all over the world, including theirsubsidiaries.
Join the Trace the Tax campaignUse ActionAid and Christian Aid websites to findout what you can do and how you can campaignagainst tax haven secrecy.