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One of the UK Prime Minister Cameron main points in the agenda for the G8 Summit was to take some measures against tax evasion. The Countries participating in the summit agreed in some important points (see below) but they were too general and without details or deadlines.
The UK has crown dependencies and overseas territories who are tax havens used by multinationals and millionaires to shelter cash from tax authorities in their Countries of origin. According to the BBC, last week the Government unveiled a deal with this territories – including the Channel Islands, Gibraltar and Anguilla – to start sharing more information on which foreign companies bank their profits there. The UK has five such territories.
Something they could have done much more earlier, when the UK politicians in power were criticizing the money laundering and tax evasion from no so clean companies, knowing that they could stop their own tax havens. Those critics included mining companies operating in Developing Countries or conflict zones as it appears in the declaration agreed last Tuesday.
If now they are willing to control their own back yard there is good news for the world. And would be better if other rich countries that have tax havens will follow their example. But the language is still unspecific “start sharing more information” is a beginning of some kind of control but not the total end of the problem. And then, the companies always can shift from one safe haven to another safer if they smell danger.
It seems that the effective control of tax evasion will take time, but it is a good thing the possible solution is now in a paper. Let’s hope it will go further and don’t stay in a paper for ever, but get to the ground in concrete measures not only agreed by applied by the powerful members of the G8.
This is the agreement about tax evasion reached in the G8 Summit so you can decide if it is enough strong or too general and lack of details:
Private enterprise – says the G8 declaration – drives growth, reduces poverty, and creates jobs and prosperity for people around the world. Governments have a special responsibility to make proper rules and promote good governance. Fair taxes, increased transparency and open trade are vital drivers of this. We will make a real difference by doing the following:
Tax authorities across the world should automatically share information to fight the scourge of tax evasion.
Countries should change rules that let companies shift their profits across borders to avoid taxes, and multinationals should report to tax authorities what tax they pay where.
Companies should know who really owns them and tax collectors and law enforcers should be able to obtain this information easily.
Developing countries should have the information and capacity to collect the taxes owed them – and other countries have a duty to help them.
Extractive companies should report payments to all governments – and governments should publish income from such companies.
Minerals should be sourced legitimately, not plundered from conflict zones.
Land transactions should be transparent, respecting the property rights of local communities.
Governments should roll back protectionism and agree new trade deals that boost jobs and growth worldwide.
Governments should cut wasteful bureaucracy at borders and make it easier and quicker to move goods between developing countries.
Governments should publish information on laws, budgets, spending, national statistics, elections and government contracts in a way that is easy to read and re-use, so that citizens can hold them to account.