'Tackle tax haven abuse, save £18bn'

Caroline LucasA comprehensive set of measures to stem the loss of an estimated £18bn a year as result of the use of tax havens was set out in a new report launched at a Parliamentary meeting hosted by Green Party MP Caroline Lucas (right) on Tuesday night.
The report, sponsored by the PCS union, the Tax Justice Network and War On Want, proposes 18 reforms to international and domestic law, accounting practice and financial regulations. Lucas said the report would "help to convince the British people that tax avoidance is their common enemy".

She went on: "A comparatively tiny number of wealthy individuals and large companies have the means to make use of tax havens. That's the richest and most comfortable people in society, taking advantage of the poorest and most vulnerable, who don't have the luxury of choosing how much tax they pay."

Progressive tax

The report calls the case against tax havens "uncontestable" and says they are a threat to establishing a progressive tax system. It also accuses the government of "actively encouraging" tax haven activity and says measures to eliminate tax haven abuse should not hurt the local populations of tax havens.

Among the reforms called for in the full report, linked below, are;
  • Automatic information exchange requiring all tax haven bank accounts to be notified to the countries where their owners live.
  • Legislate in the UK to require better disclosure from UK companies and trusts.
  • Abolish the domicile rule that helps make the UK a tax haven.
  • Boost HMRC resources to enable it to tackle tax haven abuse and tax avoidance.
  • Greater corporate transparency in the Crown Dependencies.
  • Support for a European common corporate tax base to tackle transfer pricing.
  • Introduction of country-by-country reporting for multinationals.
  • Holding credit card companies to account for the use of cards from offshore jurisdictions.

The report says these measures, and the others it proposes, will help to meet the commitment made at the London G20 Summit that said the "era of secrecy banking is over". It observes that, so far, "the procedures put in place to achieve this goal fall very far short of what is needed".

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