Christian Aid has warmly welcomed the announcement that the Central Procurement Directorate (CPD) in the Department of Finance will ask companies bidding for large contracts to self-certify that they pay the correct amount of tax.
The move comes after lobbying by Christian Aid over the past year on the issue as part of the charity's ongoing campaign against corporate tax dodging.
CPD deals with construction, supplies and services contracts on behalf of the Northern Ireland central government.
The new tax compliance questions will be asked as eligibility criteria during the procurement process when companies are bidding for public contracts over the European threshold, and companies appointed will also be subject to further checks on an ongoing basis, after appointment.
Minister of Finance Máirtín Ó Muilleoir said:
'These new measures are a step forward in ensuring that the companies government deals with are taking a fair approach to tax. The new questions strengthen our position on companies that put in place complex tax avoidance arrangements and structures that are considered unacceptable by HMRC. Companies will have to disclose if any of their tax returns have been found to be 'incorrect' by HMRC.'
According to an International Monetary Fund working paper, developing countries lose between US$100 and US$300 billion a year as a result of tax dodging.
Christian Aid says that this lost revenue could be used by governments to provide essential public services like education and healthcare for their citizens.
Christian Aid's Campaigns Coordinator David Thomas said:
'The public procurement market is worth £2.6 billion in Northern Ireland. We believe that companies bidding for these tax-payer funded contracts should be required to show that they are paying a fair share of tax themselves.
'There is an increasing public mood of anger around those individuals and companies who do not pay their taxes, especially in this time of cuts and austerity measures. We are thrilled that CPD will ask these tougher questions of the companies they do business with. This will send out the message that tax dodging is not an acceptable way to do business.'
The move aligns with Christian Aid’s 'Sourced' campaign, which is asking local councils to incorporate tax compliance questions into their procurement processes.
So far 5 of the 11 local councils have signed up to support the campaign, with the Minister also agreeing to write to the Chief Executives of the remaining councils, asking them to support the campaign.
Read more about the Sourced campaign.
Notes to editors:
1. Christian Aid works in some of the world's poorest communities in around 40 countries at any one time. We act where there is great need, regardless of religion, helping people to live a full life, free from poverty. We provide urgent, practical and effective assistance in tackling the root causes of poverty as well as its effects.
2. Christian Aid’s core belief is that the world can and must be changed so that poverty is ended: this is what we stand for. Everything we do is about ending poverty and injustice: swiftly, effectively, and sustainably. Our strategy document ‘From Inspiration to Impact’ outlines how we set about this task.
3. Christian Aid is a member of the ACT Alliance, a global coalition of more than 130 churches and church-related organisations that work together in humanitarian assistance, advocacy and development. Further details at http://actalliance.org
4. Follow Christian Aid Ireland on Twitter: twitter.com/christianaidirl
5. For more information about the work of Christian Aid, visit www.christianaid.ie