If I were Prime Minister: I'd introduce a Tax Dodging Bill that would benefit the UK, as well as many other poorer countries

Our series in the run-up to the General Election – 100 days, 100 contributors, but no politicians – continues with the Chief Executive of Oxfam GB

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The Independent Online

If I were Prime Minister, my priority would be to eradicate the pain and suffering caused by global poverty. To do this we’d need to address the persistent and growing inequality that we’re seeing around the world — from the UK to the world’s poorest countries. Tackling inequality should be a central pillar of Britain’s global leadership in shaping a fairer world. I would start by introducing a Tax Dodging Bill as part of Britain’s contribution to a fairer global tax system.

We’re living in a world where the gap between the rich and the rest is rapidly increasing and as the wealth of the few grows, the poorest are being left behind. If current trends continue then the richest 1 per cent of the world’s population will own more than half the world’s wealth by 2016. Oxfam’s research last year showed that, in the UK, just five families had the same wealth as over 12m Brits put together.

Creating a fairer tax system could make a big difference in the fight against extreme inequality. The British public are right to be outraged at the constant stories we’re hearing of multinational companies, such as Amazon and Starbucks, who are making huge profits and not paying their fair share, or big accountancy firms and high street banks helping their customers to exploit loopholes in a ludicrously complicated tax system. This really angers me, not just because it is unfair, but because it is depriving governments around the world of vital revenue needed to combat poverty.

It’s also making inequality worse: tax rules as they stand are helping the rich get richer, and that’s allowing them to buy influence which they can use to maintain the status quo.

A Tax Dodging Bill is badly needed to make it harder for big companies to dodge their taxes, stop them from getting unjustified tax breaks and make the UK tax regime much more transparent. Such a bill could bring in at least £3.6bn a year to the UK Treasury, which is the equivalent of £600 for every British household living below the official poverty line.

 

A comprehensive Tax Dodging Bill could also add billions to the budgets of poorer countries by ensuring UK tax rules don’t encourage British companies to avoid tax in developing countries. Poor countries currently miss out on more than £64.8bn each year because of corporate tax avoidance and tax incentives.

The UK has an important role to play in helping to end this because of how many powerful global corporations to which it is home. Developing countries on the other hand need stronger and fairer tax systems that all contribute to according to their means. But as a start, if corporations were taxed fairly then governments could raise revenues for things like schools and hospitals, which are vital in helping the world’s poorest escape poverty and tackle inequality.

Last month I visited Sierra Leone, a nation being devastated by Ebola, which doesn't have the public health infrastructure to cope with it. Even before the crisis struck it was a challenging environment and one of the poorest places in the world. Yet there is vast wealth in the country, in the form of its natural resources.

WATCH A CLIP FROM THE UK GOLD, A NEW DOCUMENTARY ON TAX AVOIDANCE:

The problem is the multinational companies operating in Sierra Leone aren't contributing to the country’s struggling economy.  In 2012, the tax incentives for multinationals operating there cost the government more than eight times its health budget. Just imagine how much Sierra Leone could benefit if they were able to capture this tax revenue, both in the short term and to help the country recover and build a brighter future free from poverty. This could be a crucial lifeline for the people I met, like Mohamed Kamara, who was facing a difficult future after losing his wife, child, siblings and job to Ebola and could expect no help from the state in supporting his dependants and rebuilding his life.

Having put our own house in order on tax, my government would be well placed to lead the way in tackling the broken system at the global level, ensuring that all countries, including the poorest, have a say in rewriting the world’s tax rules. This race to the bottom on tax, where countries undercut each other to offer more and more favourable deals to companies, is no good for any of us.

So in my position, I’d ensure the UK did its part to forge a global tax system that works in the public interest rather than one that allows the biggest companies and richest individuals to dodge their obligations to the poorest.

The UK Gold, a new documentary on corporate tax avoidance, airs on London Live at 8pm Wednesday 25th March. Narrated by Dominic West, and featuring an original sound score by Thom Yorke (Radiohead), Robert Del Naja (Massive Attack) and Guy Garvey (Elbow).

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