Thousands of you have been bombarding Barclays with the challenge to clean up its act on tax havens in Africa since we launched the campaign a couple of weeks ago.
Until now, Barclays has been pretty quiet. But together we’ve demonstrated that the issue isn’t going to go away and Barclays CEO Antony Jenkins has just released a response.
You can download a pdf of Barclays' full letter with our point by point response (in the yellow comment boxes - the ActionAid comments don’t show up in Google Chrome, so use a browser like Firefox or Internet Explorer), but here are the main issues...
“Barclays shares ActionAid’s belief that companies and individuals should pay the right amount of tax in the countries in which they generate revenue. We also agree with your statement that global banks have an important role to play as investors in Africa and in enabling other businesses to invest."
We’re pleased that Barclays acknowledges the importance of paying tax and the role that banks play in Africa.
“Any tax planning we undertake must comply with our Tax Principles…These state very clearly that our tax planning must support genuine commercial activity and be of a type that the tax authorities would expect.”
The fact that Barclays published a set of Tax Principles earlier this year is no bad thing. But, by pointing to its Tax Principles, Barclays is dodging the main challenge we’ve put to it:
Why won't Barclays shut down its Offshore Corporate department?
Those principles obviously aren't robust enough to stop Barclays encouraging large businesses and wealthy individuals to set up in tax havens.
Developing countries lose an estimated three times more to tax havens than they receive in aid each year. While it continues to promote tax havens and their low tax ‘advantages’ Barclays will remain part of this enormous problem for poor countries.
“Barclays does not encourage businesses to set up in any particular jurisdiction.”
We beg to differ. We believe that public statements from Barclays such as:
and: (In Mauritius) "There are no exchange controls thus allowing free repatriation of profits and capital with no withholding tax. There are no capital gains, death, wealth or gift taxes"
as well as: "Barclays Mauritius - International Banking caters for the banking needs of international non-resident entities and individuals, whose primary economic interests are outside Mauritius"
…all count as fairly obvious encouragement to set up in the tax haven of Mauritius!
What next for the campaign?
It’s clear that we need to keep up the pressure so the bank can’t dodge the big questions.
If Barclays really is committed to taking a responsible approach to tax, why won't it close down its Offshore Corporate department?