Report says one single transaction could have provided every Indian primary school child with a subsidised meal for a year if it been taxed fully
Some of the world’s poorest countries are missing out on billions each year due to investors chaneling money through tax havens before it reaches them, according to a charity report.
In How Tax Havens Plunder the Poor ActionAid claims that almost half of all money invested in developing countries goes through tax havens, with the money lost equating to three times that amount they receive in aid each year.
Mike Lewis, ActionAid’s tax expert who carried out the research, said: “As we have seen with recent cases like Google and Amazon, tax avoidance is a huge issue here in the UK.
“But evidence shows that poor countries are losing even more from tax avoidance, and are least equipped to protect fragile public revenues.
“Developing countries are being deprived of billions of dollars of tax revenue by wealthy corporations and investors using secretive tax havens.
“Tax havens are one of the main obstacles in the fight against global poverty.
“Their secrecy and harmful tax regimes leach money out of developing countries that could be used to end hunger and provide hospitals, schools and clean water.”
The charity reported that one single transaction through UK-linked tax havens would have supplied India with $2.2 billion in tax had it not taken place offshore.
The sum is almost enough to provide every Indian primary school child with a subsidised midday meal for an entire year.
In another case, a major mining firm is reported to get 84 per cent of its revenue from Africa but has just four of its 81 subsidiaries registered in African countries, and 47 registered in tax havens.
The report comes shortly before the G8 Summit in June when world leaders, including David Cameron, have an historic opportunity to call time on tax havens.
The UK is responsible for one-in-five global tax havens, more than any other country.
G8 countries are collectively responsible for 40 per cent of tax havens.
Research by ActionAid shows that 98 of the FTSE 100 companies use tax havens, showing the high involvement of British companies.
Source: The Independent