Dodges cost developing countries billions in lost revenue 

BRUSSELS, 21st November, 2011: Pressure has mounted on the EU to crack down on tax avoidance by multinational companies with the release of a report that reveals in detail and with examples how dodgy accounting deprives some of the world’s poorest nations of billions of dollars in revenue.

Multinational tax dodges are estimated to account for over half of all illicit capital flight from developing countries, thwarting poor nations’ efforts to build up their own economies. Despite commitments by OECD and G20 leaders, the problem is getting worse.

“This report shows how in a single year just one company dodged $174m of taxes in Zambia ” said Núria Molina, director of the European Network on Debt and Development (Eurodad) which produced the report

“poor countries depend on international aid because domestic resources are lost to tax dodging. Corporate tax dodging also affects European countries, therefore addressing these practices will benefit citizens both in the North and South” she added.

“The EU should consider showing leadership by implementing full country-by-country disclosure as suggested in this report this would help identify the abusive corporate practices that cost developing countries and European citizens billions each year” said Sven Giegold MEP

In 2010 US Congress passed the Dodd-Frank bill which requires listed companies in the extractive and forestry industries to disclose payments to governments on a country-by-country and project-by-project basis. The EC has released a similar proposal, Member States and MEPs have until early 2012 to improve these proposals.

Co-author of the report, Eurodad senior policy and advocacy officer, Marta Ruiz said of the proposal “This is a very welcome step to combat corruption in resource rich countries, but a full global picture of a company’s economic activity is needed to address tax dodging, the greatest source of illicit capital flight. Reporting rules must reveal this picture and apply to all sectors, as tax dodging is widespread in all industries not just extractives and forestry.”

END

Tweet

This entry was posted on Monday, November 21st, 2011 at 2:39 pm and is filed under Media, Press Releases.