Well, we’ve come a long way. Tax is making great progress along its pathway of rehabilitation back into society. To be sure, austerity has focused our minds. Now we’re really missing all those lovely things our taxes used to pay for (teachers, nurses, gritters, libraries, Sure Start centres) we’re severely unimpressed when some people and businesses don’t pay their fair share.
Conservative estimates (with a small c despite it being at the beginning of a sentence) reckon that the UK loses £35bn a year due to tax dodging. That should be enough to fix all the potholes in Sheffield’s roads and still have a bit left over for a few extra teachers and nurses. But it’s not just the UK. A few weeks ago, I was listening to Suzanne Matale from Zambia talking about the massive flow of money out of her country from tax dodging multi-national businesses. More than three times as much money leaves Africa for the rich west as is received in via international aid. Just think how many teachers, nurses and roads that would cover.
While we’re thinking, let’s reflect on why it has taken us so long to keep our promise to give 0.7% of our country’s income in overseas aid. It’s a great landmark to have reached, but why do we begrudge giving such a tiny proportion when so much more money is moving the other way? It seems so simple – if we could crack down on tax avoiders, in the long run, countries like Zambia would have plenty money to fund education, healthcare and road building, and eventually international support would no longer be needed.
But tax isn’t simple, as anyone who has wrestled with self-assessment, or even a tax credit application form will know. A lot of the time, businesses aren’t technically breaking the law. Some would say businesses have a duty to their shareholders to carry out effective “tax planning” (nice euphemism). We’ve even heard a member of the House of Lords declare that “everyone is doing it”.
So we need to take a different view. Our personal taxes are part of our contribution as citizens and solidarity with each other to build up the common good. It’s the same for businesses. It’s no longer enough to say that a business is beholden to its shareholders. It also must take care of its workers and other members of the community where it chooses to operate. It’s not acceptable for a corporation to extract all the copper from Zambia’s soil without paying its fair share of taxes to the benefit of the Zambian people. After all, where would business be without healthy, educated workers able to rely on the physical infrastructure of a country kept safe by a well functioning democracy and rule of law?
That’s the moral argument for paying tax. But it’s pretty hard challenging practice that isn’t illegal. This is where the Tax Dodging Bill comes in. A coalition of charities, including Christian Aid, Action Aid, Oxfam and Church Action on Poverty, is calling for a new bill to close some of these scandalous tax loopholes and for the additional revenue generated to be spent on tackling poverty. Most of this kind of tax dodging is possible because companies operate in a number of countries with different tax rates and laws. So vast companies like Google, Starbucks and Amazon (and even lovely homegrown Boots) can get away with paying next to nothing in tax in the UK, while smaller companies only based here pay the full amount. This is hardly fair for businesses trying to compete, nor is it fair for the rest of us missing out on essential services which lost revenue can’t pay for.
Campaigners against tax dodging are calling for the newly elected government to introduce a bill within 100 days of coming to power, which would help tackle poverty in developing countries and to use the funds raised here to tackle poverty in our society. The Tax Dodging Bill addresses foreign multinational businesses trading in the UK. It would make it harder for these companies to dodge UK taxes by ensuring they can’t use tax havens to hide profits. The bill also calls for a rigorous review of tax breaks to ensure that any which remain are truly beneficial to the UK economy, society or environment. UK tax rules should not encourage UK companies operating overseas to avoid tax in developing countries, so the bill calls for the rules to be reviewed in this light. Campaigners also want to the bill to call for more transparency in the UK tax regime, including country-by-country reporting of tax and profit data, and tougher sanctions on tax avoiders and those who provide tax avoiding advice. Finally, the campaign is calling for political parties to commit to using the funds raised in the UK to tackle poverty here.
With the election just weeks away, and no-one ahead in the polls, all parties are still creating their final messages to appeal to voters. Right now, we the people have power and influence! If you’re fed up of seeing the big boys getting away with it, join the campaign. You can email all your local parliamentary candidates about tax and sign the Tax Dodging Bill petition.
Enough is enough. Tax dodging lines the pockets of the already wealthy while robbing the poor by diverting funds away from government services. Not everyone is doing it. The richer you are, the easier it is to pay less. That’s why we need a Tax Dodging Bill now. Let’s hear it for tax collectors – we’ve come a long way from Zacchaeus and the Beatles!