Poverty is an outrage against humanity. It robs people of

dignity, freedom and hope, of power over their own lives.

Christian Aid, 2012

It is estimated that $160 billion a year is denied to developing countries

because of tax dodging.

Think about what all that money could be spent on!

Developing countries are losing more from tax dodging than they receive in

aid (from governments of rich countries and from charities like

OXFAM) each year.

First, a bit about tax ......

• We all pay tax – income tax, VAT (value-added tax) on most things we buy, road tax, council tax etc. Most of this tax goes to central government, some to local government (ie Harrow council). Then it gets spent on things like schools, hospitals, defence, social services etc.

• Like individuals, companies also pay tax (corporation tax) on their profits. This also goes to the government to spent on schools, hospitals etc.

So why aren’t poor countries getting the tax income they should?

......Because lots of big companies that operate in poor countries are legally

and illegally using tax havens.

A tax haven has.....

•Very low or zero levels of tax. •High levels of financial secrecy.

How does it work?

• A parent company creates a subsidiary company (a linked but separate company) in a tax haven that collects profits made by the company in other countries. Other countries may include Britain but often include developing countries in Asia and Africa where products like clothes and electronic equipment is made.

• The tax haven charges little or no tax on the profits.• The identity and bank accounts of the parent and

subsidiary companies can be kept secret so the true amount of profits and dodged tax stays hidden.

“There’s a building in the Cayman Islands that houses supposedly 12,000

US corporations. That’s either the biggest building in the world or the

biggest tax scam in the world.”

Barack Obama, US President

There are tax havens in ....

• Europe (including Lichtenstein, Luxembourg and Switzerland),

• islands linked to Britain’s former empire (including the Bahamas, Dubai, the Cayman Islands and Jersey) and

• countries in the US zone of influence (including the American Virgin Islands).

What can we do?

A group of organisations across the world including Christian Aid and ActionAid in the UK are calling on world leaders in the G20 (20 of the world’s most powerful economies) to end tax haven secrecy by •requiring tax information all over the world to be transparent.•Requiring multi national companies to report on all profits made all over the world, including their subsidiaries.

Join the Trace the Tax campaign

Use ActionAid and Christian Aid websites to find out what you can do and how you can campaign against tax haven secrecy.