Christian Aid Welcomes Tax Transparency Deal

Wednesday February 3

Christian Aid has described the possibility of multinational companies being made to publish their tax arrangements as potentially ‘a tremendous breakthrough in the war against tax dodging’.

The Chancellor of the Exchequer, George Osborne, last week gave his backing to a deal signed by 31 countries in January at the Organisation for Economic Co-operation and Development (OECD).

The deal will mean the automatic exchange of reports between national tax authorities, opening up the global operations of multinational businesses. The OECD say this is a step towards the aim of companies reporting profits in the countries where they are made, and paying taxes in that country.

Mr Osborne described the agreement as ‘an important step forward’.

Christian Aid’s Senior Adviser on Economic Justice, Joseph Stead, said: “We are excited to see that the Chancellor has accepted the need for multinationals to go public about the business they do, and the taxes they pay,  wherever in the world they operate. What is vital now is that Mr Osborne follows up his good words with immediate action.

“With the UK and scores of other countries, including the poorest, haemorrhaging billions every year as a result of the irresponsible tax practices of multinationals such as Google, we cannot afford any delay. Rapid action is the only way to rebuild the public trust in our companies and our government.”

Christian Aid believes the Chancellor could begin by introducing the reform very rapidly within the UK – this is something that is within the power of the UK Government and should be possible within a matter of months.

The reform in question is public country-by-country reporting, which in the wake of the Google tax row Mr Osborne has said he favours. It would see multinationals publicly revealing details such as their taxes paid, profits made, staff employed and assets owned, separately for every country in which they operate.

Mr Stead added: “At the same time as introducing the reform within the UK, the Chancellor should push for its adoption across Europe and by OECD and G20 countries. If the UK takes the lead, then there is little doubt that other countries will follow. There is already a proposal on the table from the European Parliament that the UK could support immediately.

“Finally, Mr Osborne, should ensure that there is absolute clarity about what information multinationals have to make public. The OECD has already developed a template for country-by-country reporting to tax authorities - and this should be the basis for all public reporting.”

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