Tax a 'vital weapon against poverty' and UK should use it better

By agency reporter
September 28, 2016

The UK’s aid watchdog has highlighted how the Department for International Development could more effectively help poor countries to tackle the tax avoidance and evasion that rob them of billions, in a new report welcomed by Christian Aid.

“Helping poor countries collect the taxes they are due is just the kind of smart aid that Priti Patel should be championing: stronger tax systems deliver an immediate impact and help developing countries stand on their own two feet,” said Toby Quantrill, Christian Aid’s Principal Adviser on Economic Justice.

“But the UK’s independent aid watchdog confirms today that the global tax system is fundamentally unfair to developing countries - and that UK support for tax collectors in developing countries is being undermined by its defence of outdated tax rules.”

He added: “The UK Government should rethink this two-faced approach and expand its support beyond training poor countries’ tax officials, to help ensure that global rules are better suited to the situation of poor countries.

“It should also help ensure citizens know how their taxes are spent, that governments receive the information they need to collect tax and that they are being held account to ensure they collect sufficient taxes from those that can most afford it.”

Commenting on the report released on 23 September 2016 by the UK’s Independent Commission For Aid Impact (ICAI), Mr Quantrill said: “This report echoes our own experience and the experience of our colleagues in developing countries. We hope it will persuade DFID to pay more attention to the power and politics of taxation, rather than focusing purely on the technical side of tax collection.

“As ICAI makes clear, doing good work to help developing countries strengthen their tax collection departments is not enough, on its own, to help them catch up with the wealthy individuals and multinational corporations robbing them of billions.

“For that to happen, developing countries need global rules that work for them, and need access to the information they urgently need to track down those moving and hiding money ‘offshore’, in tax havens including those controlled by the UK.

“The governments of poor countries must be involved in a genuinely inclusive process of global rule-making on tax. Also, and just as critically, their citizens and civil society organisations in poor countries should be provided with the information, expertise and support they need to engage in global debates and to hold their own governments to account more effectively.”

Mr Quantrill added: “ICAI is also right to say that it is disappointing that the UK has not been better at ensuring that its good work in poor countries is not undermined by its own tax policies and practices.

“There are many things that could be done by the UK government to ensure that poor countries’ governments have a better chance of collecting taxes from the UK-based companies operating in their countries and from rich individuals who chose to hide their money in UK controlled tax havens.” 

Read the ICAI  report here


* Chrisian Aid


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