Our campaign to end tax avoidance by global multinationals has now placed tax firmly on the agenda of the G7 meeting. An initial agreement to end global corporate tax dodging is within reach.
Last weekend the Labour party wrote to the Chancellor, Rishi Sunak, calling on the government to support a global deal to ensure big companies pay their fair share.
The Financial Times came out in support of the plan put forward by President Biden to have a global minimum corporation tax rate. This would help end tax avoidance by big multinational companies. It would also put pressure on tax havens.
Former Prime Minister, Gordon Brown, wrote in favour of a deal. The Daily Express and Guardian newspapers raised uncomfortable questions about why the UK is so slow to get behind the plan.
By Monday evening the UK’s position on the Biden plan was the main topic of debate in Parliament. It was great to hear MPs across the board speaking out in favour of a global deal to curb tax dodging.
On Thursday the media was reporting that tax will now be on the agenda for the G7 meeting of the world’s richest countries, hosted by the UK in mid-June. This is a real success and shows how with some smart campaigning we can make things happen.
Friday saw business leaders come out in favour of a global deal. In a joint letter, 70 prominent business figures argued that a strong deal would help tackle tax avoidance. Signatories include former senior Facebook executive Brian Boland, James Timpson, founder of key-cutters Timpsons’, Gemma McGough of Eleos Compliance and Jerry Greenfield, co-founder of Ben and Jerry’s ice cream. The letter and full list of signatories is here.
However, there’s more work to be done to ensure that the UK backs a strong agreement. The current rumours are that the G7 leaders will agree to a 15% global minimum tax rate. This is far too low and we’re calling for a minimum rate set at 25%. Any deal must also work for lower income countries as well. Our allies at the Tax Justice Network have set out what this should look like.
It's also a problem that the deal is being doing by a small group of rich and powerful countries. Global tax policy needs to be set in a much more democratic way. Tax justice campaigners are calling for the UN to take the lead, in the same way as currently happens on climate issues.
This week's news shows that campaigning can have an impact. We'll keep fighting for a fairer tax system.
The media has reported that Chancellor Rishi Sunak is blocking efforts to end tax avoidance by big multinational companies.
The US President, Joe Biden, has proposed a deal to ensure that all the biggest multinationals are required to pay at least 21% tax on their profits. According to our analysis, it could raise up to £13.5 billion a year for investment in things like the NHS or "levelling up" in the UK.
The UK government has indicated that they are willing to block the introduction of a global minimum corporate tax rate if there isn’t also a deal on taxing the tech multinationals – an international mechanism to replace the UK’s Digital Services Tax (DST).
However, as Tax Justice Network Chief Executive, Alex Cobham, said: “The UK's position simply doesn't hold water. They’re claiming that they want to make sure tech multinationals are properly taxed, while blocking the best opportunity for a generation to curb corporate tax abuse across the board.”
It’s time that the UK either gets with the international momentum for tax justice, or else comes out openly as the last big defender of tax havenry.
You can help us pressure the UK to back the Biden plan by signing and sharing our petition.