As tax avoidance once again hits the headlines with the Prime Minister calling it morally wrong, why is the Government planning to introduce a new tax loophole that could cost the UK and developing countries billions?
Mike Lewis, Head of Tax Justice Policy at ActionAid said: "While the government is calling Jimmy Carr's tax affairs morally wrong, it's opening up a major new tax avoidance loophole in the Finance Bill this week, making it easier for UK companies to shift profits into tax havens. This new loophole could cost poor countries £4bn and the UK nearly £1bn a year. Tax dodging already costs developing countries more each year than they receive in aid, and that's the real scandal.
"Despite the political firestorm now raging over tax avoidance, the Coalition Government is refusing even to assess the impact of this new loophole and amend the Bill. It doesn't make sense. This is a perfect opportunity for them to stop talking and actually clamp down on tax avoidance. This issue will not go away so the Government should back up their words with real action, and help stop the damage that tax avoidance causes to public finances, not only the UK but in developing countries."
Read ActionAid’s report Collateral Damage on how changes to CFC rules could cost the UK and developing countries billions.