Call for UK to support G-24 emerging economy proposals at OECD

By October 7, 2021News

The Fair Tax Foundation has co-ordinated the production of the following open letter to the UK’s Chancellor, Rishi Sunak – which has the support of numerous civil society groups, including the All-Party Parliamentary Group on Anti-Corruption and Responsible Tax, Tax Justice UK and Christian Aid.

It calls on the UK to support the G-24 emerging economies in their request that the OECD’s forthcoming global tax deal (that will be discussed again on Friday, 8th October) will be improved, to the benefit of both developed and developing world countries. If this is not done then there is a real danger that this once in a generation opportunity to fix the global tax system will be lost, with the deal unravelling, or worse still, becoming a paper tiger. 

Across the globe, close to 40% of multinational profits (some $950 billion) are artificially shifted to tax havens each year, leading to a $240bn reduction in corporate income tax revenue, or 10% of global corporate tax receipts. The UK suffers a staggering $120bn of profit shifting, which leads to an estimated 28% reduction in corporation tax revenues. [i]

Businesses that embrace responsible tax conduct understand that tax contributions are a key part of the positive social and economic impact that they make – and they have a right to expect a level playing field when they compete domestically and internationally.

Dear Chancellor of the Exchequer Rishi Sunak,

OECD member states will gather on Friday (8th October) and attempt to move forward a new international tax rulebook.

The UK has recently helped advance discussions, not least in June at the G7 gathering that your Government hosted.

Substantial progress was made, but much more is needed.

At the very least, we call on you to support the proposals of the G-24 emerging economies, which would ensure that the tax avoidance of the likes of Amazon and Facebook is curtailed further still across the globe, including in the UK, and that countries in the global South secure a fairer share of proceeds.

After the G7 gathering in June, you said “These seismic tax reforms are something the UK has been pushing for and are a huge prize for the British taxpayer – creating a fairer tax system fit for the 21st century.”

However, there is a real danger that if the deal on table is not improved (which disproportionately favours the world’s richest countries), then the entire deal will unravel, and the world will miss out on this once in a generation opportunity to tackle the scourge of tax dodging and to level up.

We ask that the UK goes the extra mile and stands by its aim to secure a truly historic tax agreement, and at the same time enhance the ability of developed and developing countries to better secure vital revenues and tax justice.

Paul Monaghan, Fair Tax Foundation

Anna Turley, APPG on Anti-Corruption and Responsible Tax

Robert Palmer, Tax Justice UK

Cat Jenkins, Church Action for Tax Justice

Oliver Pearce, Christian Aid

Rebecca Gowland, Patriotic Millionaires

Dr Mary-Ann Stephenson, UK Women’s Budget Group

Prem Sikka, Association for Accountancy and Business Affairs

Rachel Bentley, Centre for Local Economic Strategies

Rob Harrison, Ethical Consumer

 

[i] See Thomas Tørsløv, Ludvig Wier and Gabriel Zucman (2021). “The Missing Profits of Nations.” Amounts are in current US$ and relate to 2018. Available online at https://missingprofits.world/