Panama Is Just the Tip of the Iceberg: Global Tax Avoidance Is Literally Killing the Poor

06 Apr 2016
We knew global corporations were avoiding tax, now the Panama-papers leaks have shown us that world leaders are at it too.

But Panama is only the tip of the iceberg. 

Britain itself is the head of the world's largest financial secrecy network, and is facilitating tax avoidance by refusing make its overseas territories expose the names of the individuals and companies that are hiding their wealth there.

Britain's refusal to shut its tax havens also makes possible tax avoidance by global corporations and global leaders.This is a stitch up. Meaningful reform of the tax system in the interest of the public is being prevented due to the interests of the world's rich and powerful, who are making a killing.Those literally being killed from this cosy deal are the world's poor.

Every year around $200bn of untaxed income is taken out of poor countries by the international corporations operating on their territory. That is around 50% more than the total amount they receive in aid from rich counties.An estimated 1,000 children die each day across the developing world because illicit and untaxed income is spirited away from developed countries into tax havens.

Without the flow of untaxed money leaving the continent, Africa would on average be on course to hit the fourth Millennium Development Goal this year of reducing by two-thirds the under-five mortality rate. Now it will have to wait until 2029.

Britain should require that all of its crown dependencies and overseas territories such as the British Virgin and Cayman Islands attend the anti-corruption summit in May to pressure them to make public the names of the individuals and companies who are hiding untaxed or laundered income on their territories. Not doing so would mean the summit is a charade. The government should also launch an investigation into the affects of UK tax treaties on development in poor countries. Ireland and the Netherlands have done this, Britain should do the same.

For too long we have exploited poor countries for our own enrichment. Now we exploit poor countries for the enrichment of private multinationals. By fixing the global tax system we are also sending a message that Britain supports fair play. We are saying that we support the poor over the rich, the many over the few and public service over private greed.

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