Evasion of duty · Issue 871

Gareth Ludkin questions the morality of wealthy individuals and companies who avoid paying taxes on their earnings

Last week I was shocked to find out about a Christian Aid report which has brought to light in a dramatic way the true cost of tax havens, tax evasion and tax avoidance. The report ‘In Death and Taxes: the True Toll of Tax-dodging’ reveals that some of the poorest, under-developed countries in the world are being cheated out of $160bn (£82bn) a year.

Huge trans-national companies avoiding taxation have been depriving developing countries of vital tax revenue for years. Put in the right hands for the right reasons, this tax revenue could unequivocally save the lives of thousands and thousands of men, women and children. The $160bn of tax revenue goes far and beyond the $40-60bn the World Bank estimates is needed to pay for the UN’s Millennium Development Goals, which aims to save the lives of 350,000 children a year.

To me, this news is a disgusting example of the bloated greed displayed by some of the biggest trans-national companies who hide their moneybags in tax havens across the world. The report states that tax evasion is part of a “sliding scale of legitimacy,” in which increasingly ingenious methods are used to get around the rules and shelter corporate profits. It also states that “every trans-national corporation uses holding companies,” and lists BP, Wal-Mart, Royal Dutch Shell, ExxonMobil and Ford Motor Company’s reinsurance group as culprits of tax evasion and offshore holdings.

The key offshore countries mentioned are Jersey, Guernsey, The Isle Of Man, The Cayman Islands, Bermuda and The British Virgin Islands, highlighted due to the link with the British crown.

Although these are only a few of the many tax havens around the world, Christian Aid is keen to point out how the British Government has such an important role to play. The fact that these companies and many more are getting away with this is criminal; countries rich in oil, gold and many vital minerals are being stripped of their assets and receiving the lowest possible amount for their goods. Basically, not paying royalties means that companies have the land and minerals for free and at no particular cost to their profits.

For me, this is a real humanitarian issue – the fact is that taking the rightful tax revenues and making sure they go to the right people for the right causes is essential for solving world poverty. Think how over 20 years the face of Africa could be changed and the number of children’s lives that would be saved.

The report believes that there is $11bn stored away in tax havens: money which can and should be used for humanitarian good, rather than for company profit. This greed is blatant and disgusting. The longer this goes on the fewer people it can help. These faceless companies who try to persuade us that they care about the world we live in are draining our natural resources and killing millions of people through their greed.

It is not just the super rich conglomerates that are to blame; the super-rich themselves play a huge part in tax evasion. Christian Aid criticises individuals such as Lewis Hamilton and pop stars like Phil Collins and, most interestingly, Bono for minimising their tax bills.

The irony is of course that Bono, such a stringent campaigner for the abolition of poverty in the world, is actually only adding to the effects, an issue I wonder if he is aware of or not. I hope not, or else he has become one almighty hypocrite. Christian Aid suggests that tax abuse “is so widespread it is tantamount to a new slavery” a very worrying statement and an issue which needs to be challenged.

Dr Daleep Mukarji, the director of Christian Aid, presents the stark reality of the effects of tax evasion. He said: “We predict that illegal trade-related tax evasion alone will be responsible for the deaths of 5.6 million children under the age of five between 2000 and 2015; that’s almost 1,000 a day.”

This blatant disregard for life is worrying for a country such as Britain that pledges so much to help solve poverty. All they need to do is create a way in which unclaimed tax revenue can go to the countries that have earned it for working tirelessly on less than a minimum wage and who have not reaped the benefits from their mineral-rich land. 5.6 million lives could and should be saved. This report by Christian Aid is truly eye opening, and I really hope that governments take note and take decisive action.

We too as a democratic society should make our voices heard on this issue and stop massive conglomerates running away with money they do not deserve. I would feel sick to the pit of my stomach if I was one of the faceless corporate owners of these conglomerates knowing what I now know. Something so simple could improve the lives so much for millions of children.