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.