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3 October 2014

ADDRESSING TAX DODGING BY MULTI-NATIONAL COMPANIES 


For every $1 in aid to developing countries, several dollars slip out through tax dodging. That is money which should be spent building hospitals and schools.

Tax revenue enables governments to provide essential services such as health and education as well as infrastructure such as roads and transport.  Tax evasion deprives everyday people of these vital services.  In developing countries this can mean the difference between life and death.

Illegal, trade-related tax evasion alone will be responsible for some 5.6 million deaths of young children in the developing world between 2000 and 2015.  That is almost 1,000 a day.

Money that is lost to the developing world in unpaid taxes would be enough to reach the United Nations Millennium Development Goals several times over.  These goals aim to halve world poverty by 2015, a target which could be easily achieved if tax systems favoured the poor instead of the rich.

As much as US$255 billion is lost every year to governments around the world because of the no or low taxation of funds in offshore centres.

Visit the Global Financial Integrity website for up to date information about these issues

The Australian government has recently ordered aggressive audits and detailed investigations into their accounting, aiming to set an example for other wealthy nations at a meeting of Group of 20 finance ministers in Cairns later this month.

The Australian government estimates tax avoidance by multinationals costs the country more than 1 billion Australian dollars a year in revenue.

Recently it was reported that Swedish furniture giant IKEA paid just A$7.7 million in tax in Australia in the fiscal year to June, despite making an operating profit of A$92 million. That equates to a tax rate of 11% against the country's standard 30% level for companies.

Australian newspapers have also reported that Google Inc. A$466,000 in annual tax locally while making profit of closer to A$2 billion, and that Apple had shifted almost A$9 billion in untaxed profit over a decade to Ireland.

Visit the Tax Justice Network Australia website   to view its recommendations to the Australian Government to
legislate to stop Tax Dodging.

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