Osborne introduces yet another tax loophole that will cost poor countries £4bn a year

Brexit & Foreign Policy

George Osborne pushed through the Finance Bill last night without an amendment that mitigates the impact of a new tax loophole on developing countries.

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George Osborne pushed through the Finance Bill last night without an amendment that would have mitigated the impact of a new tax loophole on developing countries.

The government’s failure to permit the amendment makes it easier and more lucrative to dodge taxes in poor countries, costing them and the UK billions in lost tax revenue; it will cost developing countries up to £4 billion a year in lost taxes, stinging the UK for £1 billion a year.

George-Osborne-corpseActionAid’s Mel Ward responded:

“The new tax loophole pushed through parliament yesterday is a green light for tax dodging in the world’s poorest countries.

“It is a lose-lose move which could cost developing countries up to £4 billion a year, and will cost the UK £1 billion a year in lost taxes.

“It is deeply hypocritical for the coalition government to, on the one hand call tax dodging ‘morally repugnant’, but on the other make it easier for companies to dodge their taxes.”

Adding:

“The truth is that while the government has been promising to crack down on tax avoidance, they’ve actually been making it easier for big companies to shift profits out of poor countries into tax havens.

“In doing so they have not only neglected the needs of poor countries but ignored the advice of the IMF, World Bank, OECD and UN. The government has missed a big opportunity to back up its tough talk on tax avoidance and make it a real priority with concrete action.”

 

See also:

• Osborne allows tax avoiders to get away with murder – while you pick up the tab 15 May 2012

• Osborne, Barclays, the Cayman Islands and tax avoidance 17 Apr 2012

• The Treasury dodges the question on its new tax loophole for multinationals 7 Mar 2012

 

In May, Left Foot Forward reported how giant multinationals like Glaxo SmithKline are using overseas subsidiaries to avoid paying millions in pounds in tax – with the chancellor, instead of clamping down on it, relaxing the rules to make the shifty manoeuvre easier to perform, resulting in large British multinationals increasing their use of tax havens like the Cayman Islands to dodge their taxes in the developing world.

Once again, Mr Osborne shows his true colours; for the few, now the many – for tax dodgers, not the world’s poorest.

 

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