Christian Aid has welcomed comedian Jimmy Carr’s apology for using an aggressive tax avoidance scheme and his pledge to conduct his financial affairs “much more responsibly” in future. They said that tax-dodging corporations should follow suit.
Joseph Stead, Christian Aid’s senior economic justice adviser, said corporations using tax haven secrecy to minimise their tax should recognise that public feeling is increasingly turning against such strategies.
He said, “Jimmy Carr’s apology is welcome, as is his undertaking to avoid such schemes in future. But he is just one man.”
Christian Aid said they hoped that the controversy, and Carr's decision, would encourage others, including corporations, to look more closely at their tax affairs.
Christian Aid estimate that multinationals trading in the global south deprive developing countries of some US$160 billion in lost tax revenues every year by using tax havens to minimise their liability.
"This is done by manipulating internal corporate trading in a way that poorer countries have neither the expertise nor resources to counter,” explained Stead. “As a result, they lose out massively on funds that could go towards schools, hospitals and improved food security.”
He added, “Companies using such strategies must understand that there is a growing recognition that while aggressive tax avoidance schemes may be perfectly legal, they are morally reprehensible”.
In a Twitter post yesterday (21 June) Jimmy Carr said, “I now realise that I have made a terrible error of judgement”.
His admission followed an attack on aggressive tax avoidance schemes by Prime Minister David Cameron who said they were “morally wrong”. Cameron spoke out after Carr's tax situation received widespread media attention. Critics of the Prime Minister point out that tax avoidance is practised by a number of the government's own supporters.
Christian Aid argued that governments, as well as corporations, have a responsibility to act. Stead urged UK ministers “to close the loopholes that allows this kind of activity to go unchecked, particularly when it allows corporations in rich countries to have such a damaging impact on peoples’ lives in poorer countries”.
He insisted, “The need is urgent and must be quickly met”.