Tuesday, June 02, 2015

Tax Evasion Revealed

Oxfam found companies based in the G7 nations made big profits from African operations and are fleecing Africa for nearly £4 billion a year in taxes, their report claims. They use a dodge called mispricing to shift profits to low-tax countries like the UK and Luxembourg to avoid higher local levies.

The money avoided in tax is three times the amount needed to plug the healthcare funding gap in the Ebola-hit states of Sierra Leone, Liberia, Guinea and Guinea Bissau.
Oxfam’s Nick Bryer, said: “Multinational companies, many with headquarters in the UK and other G7 countries, are cheating African countries out of billions of dollars in vital tax revenues that could help vulnerable people get decent healthcare and send their children to school.”

One quarter of South Africans go to bed hungry each night and a further 25 percent are at risk of missing a meal, said Malcolm Damon, director of Economic Justice Network for southern Africa. Governments need resources to reduce poverty, Malcolm Damon, director of Economic Justice Network for southern Africa said. "Though it is legal what transnational corporations are doing in transferring profits, the fact is that it is an immoral situation,"  in a telephone interview. 

Sadly, the best Oxfam came up with is a proposal for an international organization on taxes. But even economically sophisticated nations with complex rules and laws on taxes cannot stop the export of profits by off-shore accounting and tax havens.

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