Financial Transparency Coalition

BRUSSELS - Pressure has mounted on the EU to crack down on tax avoidance by multinational companies with the release of a report that reveals in detail and with examples how dodgy accounting deprives some of the world's poorest nations of billions of dollars in revenue. Multinational tax dodges are estimated to account for over half of all illicit capital flight from developing countries, thwarting poor nations' efforts to build up their own economies. Despite commitments by OECD and G20 leaders, the problem is getting worse.

Gibralter proves that it's just more of the same.

The European Commission released a proposal for country-by-country reporting on 25 October, this will help to address corruption surrounding extractive industries and logging. However this will not address the larger problem of tax dodging which is prevalent in these industries and widespread in all other sectors. European parliamentarians and member states could improve the proposal so that tax issues in all sectors are covered.

In July 2010, the U.S. Congress passed Section 1504 of the Dodd-Frank Act, a measure requiring companies registered with the Securities and Exchange Commission (SEC) to publicly report how much they pay governments for access to oil, gas and minerals, country-by-country and project-by-project. The SEC is developing final rules to put the disclosure requirement into effect. In October 2011, the European Commission issued draft directives requiring companies listed on EU stock exchanges and large private companies based in member states to disclose their payments to governments for oil, gas, minerals and timber, country-by-country and per project. After developing a final...