Is it time to get personal on tax dodging?
The people who read this blog tend to be rationalists and progressive, so they won’t need much convincing that tax avoidance is a big (and lethal) deal. Oxfam calculates that just a third of the $100bn [approx. £78bn] tax that companies dodge in poor countries annually is enough to cover the bill for essential healthcare (vaccinations, midwives and diarrhoea treatment) that could prevent the needless deaths of eight million mothers, babies and children.
But we’ve been putting out these kinds of ‘killer facts’ for years, and our market research suggests that tax remains an issue that fails to move the public – too geeky; too remote. It shows the limits to the kinds of evidence-based narratives we were discussing in the Netherlands last week. (Ed Cairns will have more on that later this week).
So we decided to try and humanize the issue, asking the Don’t Panic Creative Agency that produced the award-winning Syria video for Save the Children to come up with something that would make tax avoidance an urgent, human issue that ‘cuts through’ to the non-wonk world. Here’s what they came up with: ‘The Heist No One is Talking About’. What do you think?
And if you prefer your evidence less personal and upsetting, here you go (from the press release accompanying the film).
‘Oxfam is urging the Chancellor to use next month’s Budget to commit to implementing tougher tax laws for British multinationals, including those that operate in developing countries, by the end of 2019. As movement towards an EU tax transparency deal has stalled, it is calling on him to push ahead and build on the leadership some UK companies have already shown.
More than a year since the Government passed legislation to enable the introduction of comprehensive public country by country reporting for UK-based companies and nearly two years since the last Conservative government agreed the case had been made for the change, it is still no closer to being a reality.
The authors of ‘Advancing social and economic development by investing in women’s and children’s health: a new Global Investment Framework’, which draws on the work of a group coordinated by the WHO and The Partnership for Maternal, Newborn & Child Health, estimate that 147m child deaths, 32m stillbirths and 5m maternal deaths could be avoided if health expenditures increased by US$5 per capita per year between 2013 and 2035. The report examines 74 countries with large numbers of people living in poverty which experience 95 percent of global maternal and child mortality, such as India and Zambia. Oxfam’s figures are annual averages based on the aggregate numbers i.e. a total spend of $678.1bn, or $29.48bn a year over 23 years, to prevent 7.78m child deaths and 217,000 maternal deaths annually.
The UN estimates that corporate tax avoidance costs developing countries at least $100bn a year, i.e. $8.3bn a month and $33.3bn every four months.
The Flint Amendment to the UK’s Finance Bill was accepted on 5 September 2016 and empowered ministers to require large multinationals with a headquarters or substantial presence in the UK to publish headline information about their income, employment and taxes. The UK Government has been waiting for a corresponding EU-wide deal on public country by country reporting to progress – but this has been held up and it’s unclear if EU leaders would approve it.
The IMF says that corporate income tax contributes around 16 percent of government revenue in poor countries compared to around 8 percent in rich countries. While corporate income tax rates have fallen in recent years, developing countries are likely to still depend on it roughly twice as much.
How tax collection affects health spending: Financing universal health coverage – effects of alternative tax structures on public health systems: cross-national modelling in 89 low-income and middle-income countries
In July, RB, the British manufacturer of Dettol and Nurofen, called for tougher tax laws that would protect poor countries following an Oxfam investigation.’