Winners Of New ‘Alternative Tax Awards’ Revealed
Christian Aid today (Thursday 21 May) announces the winners of its new Alternative Tax Awards. Categories include Tax Haven Enthusiast of the Year, Low Tax Rate Achievement and Most Surprising Use of Tax Havens.
Christian Aid has created the Alternative Tax Awards to draw attention to the devastating effect corporate tax dodging has on poor countries. ‘We calculate that multinational corporations and other companies trading internationally dodge at least $160 billion in taxes in the developing world every year,’ says Christian Aid’s tax campaign manager, Judith Cavanagh.
‘This is one-and-a-half times the total annual amount of aid that poor countries receive and is desperately needed to fund public services such as hospitals and schools. We estimate that if the money was used according to current spending patterns, then the lives of some 350,000 children under five would be saved each year.
‘Much of the money that goes missing ends up in tax havens. The accounting rules must be reformed to prevent this happening. Tax dodging costs lives.’
Christian Aid will hold its Alternative Tax Awards ceremony outside the Hilton Hotel on Park Lane at 7.45pm this evening. The winners – detailed below - are invited to collect their trophies from us.
Greatest Potential for Tax Reform: The joint winners are the Big Four accountancy firms - PriceWaterhouse Coopers, KPMG, Ernst & Young and Deloitte & Touche - together with the International Accounting Standards Board. These five organisations have between them the power to change the rules to help developing countries obtain the money that is rightfully theirs.
Most Surprising Use of Tax Havens:
The joint winners of this award are CDC Group plc and its sole owner, the UK Government’s Department for International Development (DFID). CDC has 72 subsidiaries, of which 40 are in tax havens including Bermuda, Mauritius and the Netherlands Antilles, the company told MPs in December 2008.
DFID argues that if CDC did not use tax havens, then investors in the funds used by CDC would be taxed twice. Christian Aid nonetheless finds it astonishing that the government department set up to tackle international poverty allows its own company to exploit tax havens as a means of avoiding tax in developing countries.
Low Tax Rate Achievement Award
P&O cruises’ owner Carnival deserves a special mention for its outstanding, dedicated and entirely legal use of tax avoidance. Between 2002 and 2008 inclusive, Carnival plc paid tax of just $61.7 million on total profits of $4.3bn. This is an effective tax paid tax rate, over the seven years, of approximately 1.4 per cent.
Tax Haven Enthusiast of the Year:
The winner of this award is Barclays plc. The financial services company is extremely keen on tax havens – with subsidiaries in some 315 of them. Again, this is entirely legal.
Most Overhyped Reform of the International Tax System:
Bilateral Tax Information Exchange Treaties (TIEAs) are the clear winner of this award. The Organisation for Economic Co-Operation and Development says TIEAs are an important weapon against tax dodging. They are voluntary instruments, however, which offer little or nothing to developing countries.
Join Christian Aid’s call for the Big Four accountancy firms to support country-by-country reporting here.