Cameron can go further in deterring use of tax havens
18 May 2016Sir, On Thursday UK prime minister David Cameron sought to look like he was doing more than react to the fallout from the Panama Papers. At the anti-corruption summit he said Britain would introduce a new corporate offence for executives who fail to prevent fraud within their companies and that foreign companies buying British properties should tell the UK authorities who owns them (May 13).
These solutions fail to get to the core of a problem that the OECD says lops $240bn each year off governments’ public finances. This toll falls disproportionally large on developing nations, which lose three times more to tax havens than they receive in aid. These lost billions, spirited offshore, could be spent on health, education or tackling climate change.
Giving the police more power to pursue tax dodgers and criminals is a good thing but why not just close the tax havens that allow the illicit activity to happen in the first place?
In 2014 Mr Cameron wrote to Britain’s tax havens: “I believe that beneficial ownership and public access to a central register is . . . vital to meeting the urgent challenges of illicit finance and tax evasion.” By refusing to implement the “vital” deterrent of making registers of beneficial ownership of UK tax havens public, Mr Cameron ensures that Britain continues to facilitate international tax avoidance, corruption and crime.
House of Commons
London SW1, UK
* This letter was originally published in The Financial Times.