Monday, July 05, 2010

Tax justice: the tide is turning

Many thanks to Action Aid's Chris Jordan for the following comment on how the tide of political opinion is changing in the direction of tax justice for developing countries:

MPs talk tax justice

2 July 2010

Yesterday saw the first big debate of the new Parliament on global poverty.

Reading through what was said, I was amazed at how MPs from all sides just couldn’t shut up about the need for tax justice!

Before we began our merry mission hardly anyone was talking about the importance of tax revenues for poor countries to break free from dependency on aid … but now they’re all at it! Our efforts to put tax justice on the map during the general election are definitely reaping rewards - so a hearty slap on the back one and all!

Here’s who said what…

Douglas Alexander (Lab)
The Secretary of State rightly talked about the importance of measures “beyond aid”, but where is the crucial strategy on issues such as taxation and development, highlighted, even in recent weeks, by the excellent work of charities such as Christian Aid and ActionAid? For example, how can we take forward steps on multilateral and automatic exchange of tax information or measures on country-by-country reporting?

Ann McKechin (Lab)
I hope … the Minister can provide an assurance that the Government support multilateral, automatic exchange of tax information between tax jurisdictions, so that we can better tackle the pernicious impact of tax havens, and a new international accounting standard that requires corporations to report on profits that they have made in every country where they operate. Those two measures will not cost the UK taxpayer a penny, but they could make a real and substantial difference to millions of the world’s poorest. I am sure that they would pass the Secretary of State’s value-for-money test.

Chris White (Con)
That work can be done enough through encouraging a fiscal and administrative reform. Countries can, thus, be helped to adopt tax systems that are fairer, easier to implement, less vulnerable to corruption and less distorting to economic activity, in order to help to develop transparency.

Anas Sarwar (Lab)
Perhaps most importantly, we need to prevent tax avoidance in developing countries by helping to build and strengthen their tax administration and collection systems. More effective tax collection is vital because not only does it provide a sustainable stream of finance for developing countries but it promotes stronger governance through an accountable state-citizen relationship. The increased stability that it brings significantly enhances the prospects of economic growth.

Katy Clark (Lab)
We need to consider other ways of providing further funding for aid. However, I ask the Government to consider not just aid, but some of the suggestions from the various non-governmental organisations campaigning on this issue, particularly the suggestions for a Tobin tax and international forms of taxation, the funding from which could be earmarked for, and directed towards, trying to do something to bridge the huge gap in the world between rich and poor, both within and between countries.

Jeremy Lefroy (Con)
Give them firm property rights, fair taxation, access to affordable finance that will not take the shirt off their back if things go wrong, and a good basic infrastructure, and they will create the jobs that are so desperately needed. They will also create the tax revenues that will pay for the health, education and other services on which they depend, as well as the stability without which no real development is possible.


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