Nearly eight out of ten people in the UK say the law needs to change to clamp down on the use of tax havens.
Only one in eleven of UK adults think the law is doing a good job of ensuring that large international companies pay the tax they are supposed to around the world.
The new YouGov poll, which lays bare public concern over tax dodging, was commissioned by ActionAid and Oxfam and is being released today ahead of the Chancellor George Osborne’s Autumn Statement. He is expected to talk about tax avoidance in the UK and say that tax reforms agreed by the G20 last week demonstrate the UK government’s commitment to cracking down on tax dodging.
ActionAid and Oxfam believe the G20 measures do not go far enough and that poor countries will continue to be the biggest losers without a second generation of tax reforms. They are calling on the Chancellor to commit to further tough action to tackle tax avoidance by UK multinationals in his Statement on Wednesday.
The charities are calling for a crackdown on tax havens, country by country reporting for UK companies and further reform of the international tax system toensure that multinationals pay their fair share of tax wherever they operate, including developing countries.
The poll also revealed the public agree that corporate tax avoidance impacts on public services in developing countries. IMF research estimates that developing countries may lose $200 billion a year to corporate tax avoidance. That money is badly needed to fund public services like healthcare and education and tackle poverty.
At home, nearly half the UK’s largest quoted companies are paying less than the 20% corporation tax rate and one in 10 pay no corporation tax at all, according to recent research on London’s FTSE 350 firms. This loss to the nation’s coffers could be due to tax breaks as well as exploiting loopholes in tax rules.
Anders Dahlbeck, ActionAid Tax Justice Adviser, said:
“British taxpayers are sick of big businesses dodging tax around the world. The public are demanding a fairer global tax system.
"The Conservative manifesto contained took some important steps on tax avoidance but the Chancellor's work is not yet done.
“If the scourge of global poverty is to be tackled bold action is needed to crackdown on tax havens,renegotiate unfair tax treaties and ensure that multinationals pay their fair share of tax wherever they operate. Ending corporate tax dodging could reduce poverty and help deliver education and healthcare for all.”
Nick Bryer, Oxfam Head of Campaigns, said:
“People in the UK are fed up with seeing wealthy individuals and household-name brands get away with rock-bottom tax bills.
“The Chancellor has promised to crack down on the scandal of tax dodging that sees the world’s most vulnerable people miss out the most, but current measures go nowhere near far enough.
“To show he’s serious about tackling tax dodging, George Osborne needs to support further international reform to close loopholes in our broken tax system and make sure all companies are reporting their profits and the tax they pay in every country where they operate.”
The key findings from the YouGov poll:
The current laws on corporate tax avoidance are not strong enough - only 9% agreed that the current law is doing a good job of ensuring that large international companies pay the tax they are due around the world. 64% of people disagreed.
Stronger rules are needed to clamp down on tax havens - 78% of people agreed that the law needs to change so that companies and wealthy individuals cannot use tax havens – places with low or very low tax rates - to reduce the amount of tax they pay in this country. Amongst those aged 55 or over that figure rises to 87%. Only 5% of the UK public disagreed with the need to change the law.
Company behaviour - only 20% agreed with the statement that ‘Large international companies should be able to do anything they can to reduce the amount of tax they pay as long as they are not breaking the law’. 53% disagreed.
Corporate tax avoidance impacts on developing countries - only 15% agreed that the tax practices of large international companies – utilising places with low or very low tax - has no impact on the gap in wealth between rich and poor countries. In addition 45% agreed that public services like schools and hospitals in poor countries suffer due to the tax arrangements of large international companies (11% disagreed.)
ActionAid’s 2015 investigation into Paladin, an Australian Uranium mining company, revealed how the company managed to avoid paying more than US$43m of taxes in Malawi via tax breaks and treaty shopping - routing intra-company interest and management fees payments from the Malawian subsidiary to the Australian parent company via the Netherlands.
The OECD BEPS proposals, endorsed by the G20 last week, will not prevent this type of tax avoidance
Notes to editors
For interviews and more information please contact:
ActionAid - Juan Leahy: Tel: +44 (0)20 3122 0942, Mob: +44 (0)7834 216 458, Email:Juan.Leahy@actionaid.org
Oxfam - Melanie Kramers: +44 (0)7825 088894, +44 (0)1865 472498, email@example.com
The full poll data can be found here: YouGov surveyed 2,254 GB adults aged 18+ between 28th September - 7th October 2015. The survey was carried out online. The figures have been weighted and are representative of all UK adults (aged 18+). YouGov is a member of the British Polling Council and abides by its rules.
The poll was produced on behalf of the ‘Tax Justice Together’ project which is funded by the European Union and brings together 24 NGOs from 19 countries (including 16 EU countries). The contents of this press release are the sole responsibility of ActionAid and Oxfam and can in no way be taken to reflect the views of the European Union.
ActionAid, Christian Aid and Oxfam have published a paper setting out how companies can work towards a responsible tax policy - http://www.actionaid.org.uk/getting-to-good-towards-responsible-corporate-tax-behaviour<
Background on BEPS - ActionAid and Oxfam believe the OECD tax reform proposals (BEPS - the Base Erosion and Profit Shifting process) backed by the Chancellor and endorsed by the G20, do not go far enough and have failed to consider some of the most important issues affecting developing countries, including tax competition between countries. Only a handful of developing countries were allowed to participate in the BEPS talks, at a point when most of the work had been done. The IMF estimates corporate tax avoidance costs developing countries $200 billion per year. The BEPS proposals will not do enough to address this problem.
ActionAid’s report on the OECD BEPS proposals – ‘Patching up a broken system’:http://www.actionaid.org.uk/sites/default/files/publications/beps_-_patching_up_a_broken_tax_system_0.pdf
IMF research estimates that developing countries may lose $200 billion a year to corporate tax avoidance - see p21, Fig 3 https://www.imf.org/external/pubs/ft/wp/2015/wp15118.pdf