Chancellor has 'failed to act' on tax evasion and avoidance

By agency reporter
21 Mar 2012

UK-based international development agency Christian Aid has welcomed the Chancellor’s recognition of the ‘moral repugnance’ of tax evasion and aggressive tax avoidance, but says he has failed to act accordingly.

"George Osborne is absolutely right to call tax evasion and aggressive tax avoidance morally repugnant, because they involve often people and companies refusing to contribute their fair share to the rest of society, including the poorest people," said Sol Oyuela, Christian Aid’s Senior Political Adviser.

"The introduction of a General Anti-Avoidance Rule on tax is also in principle welcome, recognising as it does that taxpayers should follow the spirit as well as the letter of the law. What is disappointing is that Mr Osborne has not followed through on the logic of his position and tackled the root causes of tax evasion and aggressive avoidance," he added.

"His tax deal with Switzerland colludes with Swiss financial secrecy, which supports tax evasion, corruption and money laundering across the world, devastating domestic revenues in the poorest countries," said Oyuela.

The Christian Aid spokesperson continued: "Repeatedly in this Budget, the Chancellor has sought to plug holes where revenue is lost to tax dodging. But this piecemeal approach fails to tackle the root cause of the problem – financial secrecy.

"Tax dodging is an even greater challenge for poor countries, which lack the UK’s ability to throw hundreds of highly-trained tax collectors against the problem of aggressive tax avoidance and evasion.

"However the solution is the same for all countries, rich and poor: fight the financial secrecy which currently makes it so easy for companies and individuals to cheat their societies of what they owe.

"There is much that Mr Osborne could do on this front, starting with the scrapping of his reprehensible deal with the Swiss.

"UK leadership at the G20 in support of ambitious measures to enhance the transparency of multinationals is another crucial part of the solution," concluded Oyuela.

The Chancellor indicated that the basis for the new general anti-avoidance regulations would be the recent report by Graham Aaronson QC.

The report, however, is aimed only at the worst tax avoidance schemes - not the forms of tax avoidance used by some unscrupulous multinational companies that cost developing countries billions in lost tax revenues every year.

[Ekk/3]

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