Developing countries lose three times more to tax havens than they receive in aid. But will anything change as a result of this G8?
Developing countries won't be any better off immediately – this will take years, not months. But the process of change has begun. This time last year it was unthinkable that the links between tax dodging and global poverty would feature so prominently at a G8 summit. At points it was bizarre watching David Cameron, the UK prime minister, use language that could have been written by those working in development agencies. Ed Miliband, too, used the opportunity to launch a welcome call to arms in this area.
Tax has arrived as a major development issue. The action at Lough Erne in Northern Ireland didn't match the ambition of the UK government's talk but it was probably never going to. Tax avoidance is so built-in to the international system that there is a mountain to climb in terms of closing tax havens and ending it permanently.
The G8 has inched towards the foothills of that mountain; but the leaders have not yet managed to start their ascent. On Saturday, UK tax havens agreed to sign an existing tax convention that could deliver benefits to some developing countries – that was a pretty good start.
Sharing tax information
Aside from the success of establishing tax dodging as a global issue, there are mixed results on three main areas. First, on a new agreement on automatically sharing tax information that is vital for tracking down avoiders. The G8 insists their new tax information-sharing deal needs to be open to all countries including the poorest, and this is a welcome shift from cosy deals for rich countries alone. But they've made no concrete commitments yet to ensure that this will really happen or that tax havens will sign up. We still risk a two-tier tax system emerging, with developing countries left trailing.
Secret company ownership
Second, on ending secret company ownership, the outcome falls short and we have been told that black is white – more secrecy is really more openness. Some countries will gather more information on who really owns what, yet this may still be kept secret from those that need the data most, including developing countries. This strays very far from what former South African president Thabo Mbeki and his African Union panel are calling for to help reverse the illicit financial flows from the continent. It is vital that information is made publicly accessible.
Reporting on profits
We are heartened, however, that the G8 has taken steps towards requiring companies to report on the profits they make and the taxes they pay in each country where they operate. If this is taken forward in an enforceable, public way, developing countries will be able to realise real benefits.
When, together, we first raised tax dodging as a global poverty issue, we were told that we were naive, unrealistic, and uninformed.
Yet we have proved that change can happen. All of you who have walked with us can be proud of the start we have made. Whether you signed a petition, shared the campaign on Facebook, or even met with your MP. You made this change happen.
But we have a long way to go hold G8 leaders to their promises and make sure that the climb towards a tax justice accelerates in the months and years to come. And that is exactly what we'll do. Together.