Tax Havens Deprive Developing Countries
In a recent study done by a charity, ActionAid, almost half of all money invested in developing countries is channeled through tax havens and deprives the world’s poorest of billions of dollars. The Organisation for Economic Co-operation and Development estimates that the money lost to developing countries due to tax havens is almost three times more than what they receive in aid every year.
In the UK, companies such as Google and Amazon have recently proved troublesome in tax avoidance and the result is staggering to poor countries that are ill equipped to handle the repercussions. ActionAid reported that one single transaction through UK-linked tax havens would have provided India with USD 2.2 billion in tax. This sum could potentially provide every Indian primary school child with a subsidized lunch meal for an entire year.
Other countries are effected in similar ways. A major mining company reports that 84% of its revenue comes from Africa but it only has four of its 81 subsidiaries registered in African countries. “Tax havens are one of the main obstacles in the fight against global poverty,” says Mike Lewis, ActionAid’s tax expert. The secrecy of these tax havens deprive developing countries of the important resources needed to provide life saving technologies and necessities such as hospitals, schools and clean water.
Currently, the UK is responsible for one in five global tax havens which proves to be more than any other country. Furthermore, G8 countries are collectively responsible for 40% of tax havens worldwide. A G8 Summit in June, will give world leaders a historic opportunity to address the problem of these tax havens that cheat the countries that need the money the most.
– Kira Maixner
Source Daily Express