G20 Risks Undermining Fight Against Tax Dodgers, Warns Christian Aid

September 22nd, 2011

Christian Aid

WASHINGTON – The world’s most powerful countries may be about to renege on their pledges to help developing nations fight massive tax dodging by multinationals, Christian Aid is warning.

Leaked documents suggest that a communiqué due to be issued by G20 development ministers in Washington tomorrow (Friday) has been dramatically watered down from earlier versions which made strong commitments to tackle the tax dodging that harms poor countries.

‘We are alarmed by what we have heard about the draft communiqué,’ said Dr David McNair, Christian Aid’s Principal Adviser on Economic Justice.

‘Tax dodging costs developing countries some $160 billion a year – far more than they receive in aid – and in 2010, G20 heads of state committed themselves to helping poor countries increase their tax revenues

‘But we fear that on Friday, the G20 may downplay the seriousness of this menace and renege on its promises to help fight it.

‘We hear that in the latest draft communiqué, the importance of transfer-pricing – which unscrupulous companies abuse in order to evade tax– is downplayed, while references to reforms which would force multinationals to reveal more about their finances have been deleted.

‘Furthermore, we hear that even an acknowledgement that some multinational companies do dodge tax in poor countries has been deleted from the draft, along with a commitment to help poor countries improve their ability to collect taxes.

‘We would be delighted if these leaks prove wrong and if the final communiqué on Friday contains the stronger language and commitments which appeared in earlier drafts, which are the minimum acceptable.’

Alvin Mosioma, Co-ordinator of Tax Justice Network Africa, said: ‘These leaks suggest the G20 is in danger of undermining developing countries’ efforts to boost their own incomes, which they need to do to reduce poverty and fund sustainable development.

‘Other institutions such as the Africa Union and UN Economic Commission for Africa are taking concrete steps to combat illicit financial flows. But given the influence of the G20 on the global financial architecture, it is in danger of inflicting a huge setback on efforts to curb the illicit flows that are absorbed by secrecy jurisdictions—most of which are located in G20 countries.’

Christian Aid supporters are today (Thursday) emailing G20 development ministers, reminding them of G20 heads of states’ 2010 commitment to help poor countries increase their tax revenues.



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