Tax justice campaigners have welcomed the call by British Baptists to tackle corporate tax evasion.
Delegates at the Baptist Assembly, the joint annual meeting of the Baptist Union of Great Britain (BUGB) and BMS World Mission, voted overwhelmingly on May 2 to support a resolution that highlighted the effect of tax evasion and avoidance in poor countries.
They heard that the practice by multinational companies is estimated to cost underdeveloped countries $160 billion a year – more than one and a half times what those countries receive in aid.
The resolution called upon BUGB and BMS World Mission to raise with the government the concern regarding these negative impacts. It also called upon the government to show international leadership in negotiating international tax transparency for all multinational companies and an end to tax haven secrecy.
Christian Aid is actively campaigning on the issue. Alasdair Roxburgh, the charity’s economic justice campaign coordinator, was delighted to have official Baptist backing.
“This resolution is fantastic news,” he told The Baptist Times. “It really drives forward our campaign.
“It will get people to listen, sit up and take notice. Baptists have a seriously strong voice.
“And to have the support of churches will make a difference. When churches speak, change can happen.”
Jubilee Debt Campaign (JDC) was another to welcome the resolution. JDC promotes the dropping of unjust debt, which cripples dozens of poor countries and was mostly racked up by lending during the 1970s.
Spokesman Jonathan Stevenson told The Baptist Times that debt justice and tax justice are “two sides of the same coin.”
“Without the ability to collect progressive taxes and challenge corporate tax dodging, it’s much harder for developing countries to escape the debt trap, which has become more perilous since the financial crisis, and dependence on aid,” Stevenson said. “It’s great news that Baptists have passed this resolution.”
In proposing the resolution, BUGB treasurer Malcolm Broad explained that 60 percent of world trade takes place within multinationals, rather than between them.
“Countries struggling against poverty are forever prevented from competing on a level playing field,” he told the assembly. “Structural poverty is one of those causes that is too important to ignore.”
The resolution was seconded by Steve Sanderson of BMS World Mission, who said companies should be liable for tax in each country where profits are made. He added that there needs to be an “automatic tax information exchange.”
“There are tax havens where money can be secretly hidden away. We need a multilateral agreement,” Sanderson said.
Roxburgh said Christian Aid’s campaign is not about blame, but change. He added that churches can act by lobbying companies and members of Parliament.
In particular, Christian Aid is encouraging supporters to write to four firms – Vodaphone, Unilever, TUI Travel and Intercontinental Hotels Group – in the FTSE 100 firms, a share index of the 100 most highly capitalized companies listed on the London Stock Exchange, to ask them to raise the call for new global accounting measures.
“We are not accusing these companies; we’re saying they can make a massive difference,” said Roxburgh.
The Baptist Times put the assembly resolution to the Treasury. A spokeswoman said the United Kingdom is committed to helping developing countries to reduce tax avoidance and protect their own tax bases.
The “best way” to do this is through capacity building, the spokeswoman added, and the government has “long been active” in assisting the tax administrations in developing countries to design and operate their own tax rules effectively, so as to assess and collect the tax that is properly due.
Finance ministers for the G20, an informal group of 19 countries and the European Union, urged a number of jurisdictions at their last meeting to both extend their networks of tax information exchange agreements and to sign the Multilateral Convention on Mutual Administrative Assistance in Tax Matters, the spokeswoman said.
The convention has 20 signatories (including the United Kingdom) and promotes international cooperation on national tax laws with a view to combating tax avoidance and evasion.
These jurisdictions are designed to ensure that “developing countries are able to benefit from improvements in tax transparency,” the spokeswoman said.