UK Tax Havens Scandal

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‘The UK is responsible for one in five of the world’s tax havens – that’s more than any other country,’ stated Tax Justice Policy Adviser Mike Lewis of the charity ActionAid yesterday.

New ActionAid research tracking the offshore structures of the FTSE100 found that the presence of the UK’s largest companies in tax havens has not diminished, despite media scandals over widespread tax avoidance and a promised government crackdown.

Major banks, including RBS and Lloyds which since receiving multi-billion pound bailouts following the 2008 financial crash are largely-owned by the British government, are amongst the most prolific exploiters of tax havens.

ActionAid stated that fragile public revenues in some of the world’s poorest countries are being fatally undermined through corporate profit-shifting and other transactions through tax havens.

Mike Lewis confirmed that with one in eight people still going to bed hungry every night, ending tax havens’ secrecy and damaging tax regimes has never been more important.

‘Stopping wealth being siphoned out of the poorest countries into tax havens is one of the most urgent tasks in the fight against hunger.

‘But transparency deals that the UK and other European countries have recently struck with tax havens currently benefit rich countries only.’

He added: ‘Tax havens remain a key link in the chain that lets multinational companies and wealthy individuals drain billions from poor countries.

‘Tax havens are one of the biggest hidden obstacles in the fight against global poverty.

‘Poor countries lose an estimated three times more money to tax havens than they receive in aid each year – money needed to build roads, fund schools and finance developing countries’ own fight against hunger and poverty.’

A new report by the Africa Progress Panel, a group of African leaders and other international figures chaired by Kofi Annan, released last Friday, 10 May, confirmed this scandal.

It highlighted mining deals involving two FTSE100 multinationals, carried out through tax haven companies in the British Virgin Islands, Panama and Gibraltar, which the Panel claims have deprived the Democratic Republic of Congo of an estimated $1.36bn: almost twice the country’s education and health budgets combined.