The five countries that receive money from the Scottish government’s international development fund lose millions every year through tax dodging.
The Missing Millions details how the five countries supported by the Scottish Government – Malawi, Zambia, Tanzania, Rwanda and the Darfur region of Sudan - lost just under £43 million in tax revenue between 2005 and 2007. The report demands that politicians tackle the global systems that caused the economic crisis to put an end to international tax dodging and return the billions of pounds that are owed to developing countries in lost revenue.
Tax-dodging practices
Through the practice of ‘transfer mispricing’, companies can manipulate the price of exports and imports – sometimes inflating, sometimes deflating prices - to reduce profits in specific countries and thus reduce their tax liability. Regardless of the motivation, there is almost always a tax consequence. This abuse of the ‘transfer pricing’ system is facilitated by financial secrecy in tax havens and a lack for transparency in the way companies report the geographical source of their profits.
Reforming the system
The report demands a reform of existing financial regulations and the current lack of transparency which enable tax dodging practices to flourish.
For more information on the report contact, Una Bartley on 0131 240 1524 or 0753 867 6289 or at UBartley@christian-aid.org.
The scale and impact of tax dodging on the developing countries supported the Scottish Government will be explored in more detail at a half day seminar, The Missing Millions, at Edinburgh City Chambers on Wednesday 7 October. Find out more on the Missing Millions seminar page.