Major New Move Could Force Multinational Tax Transparency
October 27th, 2010
October 27th, 2010
LONDON—Multinational companies could be forced to reveal far more about their finances in developing countries following a European Commission move which Christian Aid experts welcomed as ‘hugely exciting’.
The Commission this week launched a public consultation on the introduction of new rules that would force multinationals to reveal more information than at present, including the profits they make and the taxes they pay in every country where they operate.
The information would help developing countries crack down on the tax dodging which currently costs them more than they receive in aid.
Dr David McNair, Senior Economic Justice Adviser at Christian Aid, said: ‘This is a hugely exciting move. If the new rules are introduced, then poorer countries will at last have more of the information they need to crack down on the unscrupulous multinationals which hide their profits in order to lower their tax bills.
‘At present, some companies simply shift their profits into tax havens and conceal what they are doing, for instance through exaggerated claims about the costs they have incurred in developing countries.
‘This deprives those countries of revenue which they desperately need in order to build schools, hospitals, roads and other public services which we take for granted. People living in poverty are the ones who suffer the consequences.’
That the Commission is now considering the introduction of a new accounting standard for multinationals is a major victory for Christian Aid, the Tax Justice Network and campaigning accountant Richard Murphy who created the concept of country-by-country reporting.
Christian Aid has argued for country-by-country reporting – the new accounting standard which the European Commission is now considering – because tax dodging is a massive problem for developing countries.
International organisations such as the OECD recognise that tax dodging is likely to cost developing countries more than the total that they receive in aid in each year. Christian Aid estimates that their annual loss may be as great as $160 billion.
For more information and to interview David McNair, please contact Rachel Baird on 0207 523 2446, 07545 501 749 or firstname.lastname@example.org
Notes to Editors:
1. Christian Aid works in some of the world’s poorest communities in nearly 50 countries. We act where the need is greatest, regardless of religion, helping people build the lives they deserve.
2. Christian Aid has a vision, an end to global poverty, and we believe that vision can become a reality. Our report, Poverty Over, explains what we believe needs to be done – and can be done – to end poverty. Details at http://www.christianaid.org.uk/Images/poverty-over-report.pdf
3. Christian Aid is a member of the ACT Alliance, a global coalition of 100 churches and church-related organisations that work together inhumanitarian assistance and development. Further details at http://www.actalliance.org
4. Follow Christian Aid’s newswire on Twitter: http://twitter.com/caid_newswire
5. For more information about the work of Christian Aid visit www.christianaid.org.uk
The Task Force on Financial Integrity and Economic Development addresses inequalities in the global financial system that penalize billions of people, and advocates for improved transparency and accountability.
Christian Aid is a coordinating committee and founding member of the Task Force on Financial Integrity & Economic Development.
For additional information please visit http://www.financialtransparency.org