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Tax justice - our campaign explained

Did you know that for every $10 given in aid to the developing world, $15 slips out through tax dodging?

Tax dodging denies poor countries billions of dollars in revenue each year.

People everywhere want education for their children, good healthcare and clean water. But this costs money – money that poor countries don’t have.  In wealthier countries these goals have been achieved through government investment – paid for by taxes.

Tax dodging by some unscrupulous multinational corporations is depriving poor countries of an estimated US$160 billion every year. Imagine what governments in developing countries could do with this kind of revenue in the fight against poverty.

See what tackling tax dodging could do to help feed children in Ghana

How does it work?

There are a number of reasons why multinational companies can dodge paying their taxes, but key to all of them is the lack of transparency in the global financial system.

This financial secrecy makes it easy for companies to shift money between different parts of their business around the world.

A common method of tax dodging is for a company to manipulate its profits and revenues through tax havens, which combine high levels of secrecy with very low or even zero tax rates.

Watch this short film to find out how and why tax dodging has become such a major obstacle to fighting poverty - and what we can do to end this practice:

For a full overview on tax dodging, download our report, ‘False Profits’.

What have we done so far?

With the help of renowned tax experts, we revealed that developing countries lose $160bn a year through tax dodging – far more than the global aid budget. Campaigners took our ‘Big Tax Return’ campaign directly to the Big Four accountancy firms and we ran an alternative awards ceremony outside the accountancy industry’s official awards event – calling on the Big Four to be `Tax Champions’. After this campaign, three of the Big Four started to engage in a policy dialogue with us.

Supporters then took our 'Trace the Tax' campaign to four companies in the FTSE 100 – calling on them to help us tackle tax secrecy. Stunts outside Unilever offices and Holiday Inn hotels around the country opened doors for us in these companies’ headquarters for high-level engagement with the companies’ senior managers.

Christian Aid launched the End Tax Haven Secrecy campaign with global partners, calling on the G20 to take action. We presented a petition with 40,000 signatures in person to the French president in Paris.

Tax dodging by leading multinational companies in the UK, such as Starbucks and Amazon, sparked public outrage. We used this opportunity to highlight the impact of tax dodging on poor countries too. Our Tax Justice Bus toured the UK for 53 days, meeting church leaders, communities and MPs across the land. The tax bus tour led to greater support from MPs, with some even starting their own tax campaigns. Teaming up with Church Action on Poverty, our Tax Justice Bus Tour had one clear message: that tax dodging affects poor communities both at home and overseas, and global solutions would help poor communities everywhere.

Tax became the centrepiece of the ‘IF’ campaign – with tax dodging highlighted as a major reason for hunger and poverty in developing countries. At the 'Big IF' rally in London, thousands of supporters called on the prime minister to make tax dodging the big issue at the G8. It led to the kind of rhetoric not heard before from world leaders promising to tackle the issue. Not satisfied with rhetoric and promises, Christian Aid supporters demanded that the UK Government do something about the level of secrecy in company ownership and the ability of directors and company owners to set up shell firms – also known as ‘phantom firms’ – that can conceal the truth about the profits they make, and the taxes they potentially owe. More than 20,000 people wrote to Vince Cable, persuading him to set up a public register of companies and owners, which will go a long way to curbing tax dodging in the UK – and we succeeded! This campaign continues as we try to get registers established in the UK’s tax havens in the Caribbean and elsewhere.

Across the UK students raised the issue of tax dodging in their universities’ supply chains in our ‘Sourced’ campaign and the movement to stop tax dodging grew, both here in the UK, and across the globe.

We supported the Tax Dodging Bill campaign in the run-up to the General Election, calling on all parties to introduce a single bill to parliament if elected. While no such bill was passed, the campaign helped to put corporate tax dodging firmly on the election agenda and generated a wave of new support for tax justice campaigning.

Into 2016. we’ll continue to push for a clampdown on secrecy in the UK’s tax havens and broaden our ‘Sourced’ campaign to local authorities as well as universities as the fight for tax justice goes on.

What needs to happen?

Jesus calls us to be light in dark places, exposing what the darkness hides – what our partners are doing all over the world. Our challenge is to stand alongside them and lift the veil of secrecy in the international tax system.

There are many barriers we need to break down to achieve true tax justice, but here are three specific areas where we could have a significant impact:

Currently, companies only have to publish their global profits, so it’s very hard to see where they make their money and pay their taxes.

Country-by-country reporting would require companies to report the profits made and taxes paid in every jurisdiction in which they operate.

It would enable revenue authorities and civil society organisations in developing countries to spot potential abuse and challenge crooked companies.

Our campaigners recently helped persuade EU politicians to improve transparency in this area. All oil, gas, mining and logging companies now have to publish their payments to governments in the countries where they operate – on projects worth €100,000 or more – including the taxes they pay.

Tax havens aren’t legally obliged to share information about the companies that use them. This allows large global companies to manipulate their profits through tax havens, where they pay low or no taxes.

Governments in developing countries face particular challenges in accessing this information, which they need in order to collect the taxes they are owed.

We’ve called for the automatic exchange of information between all tax jurisdictions, including tax havens. This would clamp down on a practice that sees millions of dollars owed to poor countries exported to increase profits.

Tax dodgers are hiding their profits behind smoke and mirrors. Many keep their money in phantom firms – a complex network of trusts and shell companies – to conceal the real owners, the profits they are making and the taxes they owe. 

These companies are set up ‘with no assets or employees and usually exist on paper only. Their only recorded ‘directors’ are nominees such as the lawyers or accountants who set them up on behalf of clients who remain anonymous.’

Companies registered in the British Virgin Islands helped keep more than US$5.5bn of mineral wealth from the Democratic Republic of Congo. This is just one example of the large sums being kept from developing countries though the system of phantom firms.

We need to open up the system so that the true owners of these firms are revealed.

The UK has recently announced it will create a public register of the real owners of all companies.

This will help us:

a) uncover who is dodging tax

b) uncover who is behind corrupt deals

c) hold them to account and ensure developing countries get the money that’s rightfully theirs.

Having committed to this, the government needs to ensure it works well in the UK and push for this standard of transparency in both the EU and in our overseas territories and crown dependencies.

What can you do?

Given the UK’s strong lead, we have a great opportunity to push for public registers of the beneficial owners of all companies in both the EU and in our overseas territories and crown dependencies.

Take the latest campaign action here.

We will continue to work with partners around the world to build a global movement for tax justice.

Get equipped to campaign against tax dodging.

Tax justice

Tax history

A look back at our tax campaign in pictures.

Take a look