Christian Aid is calling for an end to the secrecy surrounding the tax that multinationals pay to poor-country governments.
As the rich world comes to terms with the morning-after reality of unfolding global financial crisis, it is the poor and vulnerable in developing countries who stand to suffer most.
United Nations Secretary-General, Ban Ki-moon, warns that this crisis ‘could be the final blow that many of the poorest of the world’s poor simply cannot survive.’
No more secrets
Our report is entitled The morning after the night before: the impact of the financial crisis on the developing world.
It looks at how poor countries have suffered from the same combination of secrecy and lax regulation that triggered the current international crisis.
For decades, big business has exploited inadequate financial regulations and lack of transparency. Unscrupulous transnational corporations have aimed to minimise, avoid or even illegally evade their obligation to pay tax in the many countries where they operate.
Billions are lost to developing countries that could be used to educate more children, provide better healthcare and increase access to clean drinking water.
Christian Aid estimates that tax evasion by international business currently amounts to some US$160 billion a year.
If allocated according to present spending patterns, that sum would be enough to save the lives of 350,000 children under the age of five years.
As world leaders now struggle to control their economies in today’s market mayhem, it is imperative that they seize what is emerging as the rarest of opportunities to institute root-and-branch reform to global financial systems for the benefit of all – rich and poor alike.
What we want
The need for that effort is now more urgent than ever.
Two giant steps forward would be:
to introduce a requirement that businesses that operate transnationally must reveal publicly what they pay in tax in every country where they do business. That way abuses can be quickly identified
to reach a global agreement that will lift the cloak of secrecy that tax havens offer, forcing them to share information with tax authorities in other countries.
Download our report (250kb pdf)