Governments around the world could reap nearly $90 billion more annually in taxes if they released their data on the extent to which multinational corporations use tax havens, according to an advocacy group report.
The Tax Justice Network He said countries were depriving themselves of $89bn (£75bn) a year by allowing some of the world’s largest companies to remain anonymous about the way they conduct their tax affairs.
In its 2022 State of Tax Justice report, the Tax Justice Network (TJN) called for an end to the privilege granted to multinational corporations that will not be named and defamed if they provide information about shifting profits to tax havens under a global initiative – country by country. Reporting – pioneered by the Organization for Economic Co-operation and Development.
Some individual companies have voluntarily made their country-by-country reports public, and the Tax Justice Network said that, according to its calculations, governments could offset 28% of the $316 billion lost in cross-border “tax abuse” in 2021 if the loss of anonymity comes to light. on the activities of all multinational corporations.
The UK passed legislation in 2016 to make country-by-country reporting available, but it has never used force, and the idea was abandoned in 2020 by Rishi Sunak when he was chancellor. Last year, TJN estimates, the UK lost £27 billion to multinationals that pay less tax.
Rachel Eter-Voya, a senior researcher with the Tax Justice Network, said: Organization for Economic Co-operation and Development Waiver of corporate tax bypass is a political option to turn a blind eye. Our governments shepherd us talking about making ‘hard decisions’ to deal with the global cost-of-living crisis, then choosing to keep quiet about multinational corporations that have privately admitted cheating the public out of billions of dollars in taxes.
“They choose to protect the cherry on the cakes of the wealthiest companies while people worry about putting food on the table. Our message to governments is clear: stop the cover-up, raise living standards.
“As for multinational corporations, we urge you to disclose your taxes. If you have nothing to hide, if you are paying your fair share at a time when people are feeling bad, publish country-by-country reports.”
A government spokesperson said: “The UK has been at the forefront of international tax reforms, which include adopting minimum country-by-country OECD standards, and leading discussions to achieve the historic global tax deal last year.
“Publishing country-specific reports is unlikely to increase the additional tax revenue proposed by the Tax Justice Network because HMRC already receives these reports annually from multinational companies and uses them in its compliance work.”
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