Unilever criticised for tax haven use
From the archive: Company's tax arrangements under the spotlight
ActionAid published a FTSE 100 Tax Haven Tracker in October 2011 which tracked how many of the subsidiaries of the FTSE 100 companies were in tax havens. It uncovered that Unilever had 696 subsidiaries, 34% of which were in developing countries and 26% of which were in tax havens, including Costa Rica, Switzerland, Hong Kong, the Philippines, Guatemala and Luxembourg.
According to ActionAid corporate tax avoidance, one of the main reasons companies use tax havens, was having a massive impact on rich and poor countries alike. Developing countries it, said currently lose three times more to tax havens than they receive in aid each year.
Chris Jordan, ActionAid’s tax justice expert said: “ActionAid’s research showing the use of tax havens by Britain’s biggest companies raises serious questions they need to answer. Tax havens have a damaging impact on the UK exchequer, the stability of the international financial system, and vitally on the ability of developing countries to raise tax revenues which would lift them out of poverty and make them less dependent on aid.”
The use of tax havens facilitates tax avoidance and evasion, which undermines the revenue bases of both developing and developed countries. Additional revenues are urgently needed both to invest in the fight against poverty and to tackle the deficits incurred during the financial crisis in rich countries. Chris Jordan continued: “When multinationals use tax havens to avoid paying their fair share, ordinary people in both poor and rich countries are left to pick up the bill.
Spending on doctors, nurses and other essential services gets cut for those who need it most. Tax havens might provide the lure of financial secrecy and low tax rates for big companies, but at a time when all countries are desperate for revenues, the UK government can’t afford to turn a blind eye.” ActionAid was calling on the government to urgently rethink its current proposals to relax UK anti tax haven rules.
The Treasury itself estimated these changes would result in an £840 million tax break for multinational companies that use tax havens.
For more on tax havens come to our AGM this Friday in London. Find out more...
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