13 June 2016 - Christian Aid is calling on MPs of all parties to support a change in the law that would help rich and poor countries collect more of the tax billions they are owed by multinationals.
The move, which already has the backing of 23 Conservative, Labour, SNP and Liberal Democrat MPs, would require firms to publish much more information about their finances in every country where they operate.
That, in turn, would make it harder for them to get away with paying tiny amounts of tax in countries where they do large amounts of business.
The Chancellor George Osborne himself has spoken in favour of the legal reform, known as public country-by-country reporting.
Toby Quantrill, a tax justice expert at Christian Aid, said: “We hope that MPs of all parties will vote for this small but powerful change in the law. It would help the UK as well as other countries, including many of the poorest, to spot tax abuse by multinationals and take action to collect more of the billions they are owed.
'According to a recent paper from the IMF, developing countries lose around $200 billion every year to tax avoidance by multinational companies.
'This reform could help to ensure more funding for services that keep people alive and thriving in the developing world: everything from hospitals, ambulances and policing to schools, universities and public parks. In developing countries especially, tax revenues can make the difference between life and death.'
The tax reform in question, known as the #showmethemoney amendment, has been proposed by Caroline Flint, Member of Parliament for Don Valley, with support from other MPs from several parties. The reform also has the support of the powerful Public Accounts Committee of the House of Commons.
The House of Commons is expected to vote on the move, contained in an amendment to the Finance Bill, on 29th June.
Christian Aid has campaigned since 2008 for multinationals to be required publicly to report their financial affairs on a country-by-country basis. This is because it would shed greater light on suspicious patterns that warrant further investigation, such as disproportionately large shares of their profits supposedly arising in tax havens.
Such reporting is also in companies’ interest, as highlighted by a recent European Commission impact assessment about the potential for further transparency around income tax information. The assessment found that three-fifths of large multinational companies’ chief executives considered that corporate brand and reputation represented more than 40% of their company’s share value and market capitalisation.
'Tax reputation can have a significant effect on the value of a multinational company,' added Matti Kohonen, a private sector expert at Christian Aid.
Public country-by-country reporting is accepted by businesses such as Barclays and Credit Agricole, as well as economists from around the world and almost 60% of CEOs globally – according to research by PwC.
Charities such as ActionAid and Oxfam, as well as Christian Aid, also support public country-by-country reporting. Campaigners believe that having the UK take a lead on the reform will encourage other countries to follow suit.
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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