Tax justice campaigners have responded to the UK Prime Minister's recent World Economic Forum speech in Davos by calling for firm action to match his words.
On Thursday 24 January 2013 David Cameron announced that he intends to use the UK Presidency of the G8 to tackle global tax evasion and avoidance.
"It's all very well for Cameron to say that tax avoidance must be tackled internationally. If it’s going to have any credibility he’s got to start walking the talk here in the UK," pointed out anti-poverty campaigner, tax expert and author of The Courageous State Richard Murphy, who is also a Quaker.
Mr Cameron's declared at Davos: "There are some forms of avoidance that have become so aggressive that... it's time to call for more responsibility and for governments to act accordingly."
In what appeared to be a reference to Starbucks and others, he added: "Companies need to wake up and smell the coffee, because the customers who buy from them have had enough."
But Mr Murphy commented in the Guardian newspaper: "Cameron faces a massive domestic credibility problem ... The government's much trumpeted General Anti-Abuse Rule, which will be enacted this year, which [he] says targets tax avoidance, will deliberately not go near targeting the sorts of tax avoidance undertaken by Starbucks, Google and Amazon.
"Legislation put forward by Michael Meacher MP and written by me that would let HM Revenue & Customs challenge their sort of tax avoidance has also been rejected by the government."
On transparency, another of Mr Cameron's claims, Mr Murphy said: "At present a multinational company trading in the UK does not have to publish a separate profit and loss account for this country so we can see how much tax it pays in the UK. Nor does it have to do so for all the tax havens in which it operates. If Google, Starbucks and Amazon had been required to do that we'd have seen their tax avoidance a lot earlier. So yes, we need transparency for developing countries, but we need it too in the form of full country-by-country reporting."
On beneficial ownership, he added: "[Cameron] can begin at home by making Companies House into a regime fit for the 21st century. He should follow up with the land registry – riddled as it is with anonymous offshore companies – and then demand that our tax havens put beneficial ownership on public record just as we should."
In his Davos peroration, the UK Prime Minister said: "If there are options for more multilateral deals on automatic information exchange to catch tax evaders, we need to explore them."
Tax justice campaigner Richard Murphy responded: "I agree, wholeheartedly. It's just a shame he said this the month the UK's appalling tax agreement with Switzerland comes into force that guarantees tax evaders anonymity, lets them off most of the tax they owe, and preserves Swiss banking secrecy in the process. Germany's parliament rejected such a deal to hold out for full automatic information exchange with Switzerland. The UK harmed the cause by going ahead alone."
Meanwhile, Trades Union Congress (TUC) General Secretary Frances O'Grady commented: "We welcome the Prime Minister's commitment to use the G8 Presidency to tackle global tax avoidance. The tens of billions of pounds raised would be a much fairer and more effective way of tackling budget deficits than endless self-defeating austerity."
She continued: "Getting to grips with tax avoidance at a global level will not work unless the government takes tougher action closer to home. The UK remains a global leader for tax secrecy, both through the City and its crown dependencies around the world."
"The government should start to close the UK's multi-billion pound tax gap with a far tighter general anti-avoidance principle and minimum tax rates for those at the top so the super-rich begin to pay their fair share," said the trade union leader.
Tackling tax evasion and avoidance has become a major political issue recently, with development agencies like Christian Aid highlighting the multi-billion pound concern, and economists, tax and financial professionals, accountants, lawyers, academics and writers sharing wisdom and developing strategies through the Tax Justice Network.
The Jubilee Debt Campaign, which calls for cancellation of unpayable and unjust poor country debts, has also tackled tax issues.
* Tax Research UK: http://www.taxresearch.org.uk/
* Richard Murphy, 'Someone tell David Cameron that tax avoidance starts at home', Guardian, 24 Jan 2013: http://www.guardian.co.uk/commentisfree/2013/jan/24/david-cameron-tax-av...
* Tax Justice Network: http://www.taxjustice.net/
* Jubilee Debt Campaign: http://www.jubileedebtcampaign.org.uk/