THE BLOG
19/03/2015 09:22 GMT | Updated 19/05/2015 06:59 BST

If We Want to Live in a World Without Poverty, We Have to Take on the Tax Dodgers

The Government yesterday announced its final pre-election budget and, as expected, there was quite a bit in there on tax avoidance. That's hardly surprising - we know that there is overwhelming public support for action on tax dodging. People are angry that those most able to afford it are too often paying little or no tax. They see small business owners paying their taxes, whilst giant multinationals don't pay theirs. That's true not only here in the UK, but also in other countries where they operate, including some of the world's poorest nations. We've heard a number of announcements from various parties over the past few weeks setting out what they'd do to right this ridiculous wrong. Unfortunately none of the big parties have yet gone far enough - and yesterday's budget announcements don't change that.

Nevertheless there were some encouraging signs. The Chancellor announced steps to increase the amount of information sharing between governments, which should act as a deterrent to multinationals and rich individuals that want to hide money offshore. Osborne says that the government will impose tougher sanctions on those who evade tax, which is long over-due and certainly welcome. The so-called 'Google Tax' remains a good idea, although it does also still contain some gaping loopholes.

Osborne says his measures will recoup "£5billion from tax avoidance, evasion and aggressive tax planning". That's money that could make a huge difference to the lives of ordinary people in the UK, especially the 13million people who are currently living below the poverty line.

However, there are glaring omissions from the policies announced yesterday. Of particular concern is the absence of measures to stop UK companies who operate overseas from dodging taxes in some of the world's poorest countries. The lack of transparency in the global tax system makes it impossible to say exactly how much poorer countries are losing out on as a result of corporate tax dodging, but credible estimates suggest the figure could be as much as $160billion a year. That's more than the amount given annually by all rich countries in overseas aid. It's money that should be being spent on schools and hospitals for the world's poorest people, saving and changing millions of lives, rather than swelling the coffers of the biggest and richest companies.

We see this impact in the countries where Oxfam works. Take Zambia for example, where poverty rates continue to rise despite it having one of the fastest growing economies in the world. Tax rules are allowing multinational mining companies to generate vast profits in the country, whilst paying little or no tax. And that means that ordinary people are missing out. Take Barbara for example, a farm worker there, who told us of how the lack of a clean water supply means she has to collect water every day from a dirty and crocodile-infested river, and of how she can't afford medicines for her children when they get sick. It's unconscionable that this can be allowed to happen in a country so rich in natural resources - but it's happening because it's so easy for the companies profiting from those resources to avoid giving anything back in tax.

The lesson is clear: if we want to live in a world without poverty, we have to take on the tax dodgers. As things stand, we're making it far too easy for UK companies to avoid paying their fair share in the countries where they operate. Anti-tax haven rules which used to help protect poorer countries have been watered down to such a ridiculous extent that they are essentially now incentivising overseas tax avoidance by UK-based multinationals.

Oxfam is part of a campaign calling for whoever forms the next government to introduce a comprehensive Tax Dodging Bill, which would address tax avoidance here and overseas. This would make it harder for big companies to dodge UK taxes and make sure they are not getting unjustified tax breaks. It would toughen up our anti tax haven rules to stop companies dodging taxes here and abroad. It would require UK companies to publish their taxes and profits for each country where they do business, so the public in the UK and overseas can see how much tax they are (or aren't) paying, and where.

Since we launched our campaign calling for a Tax Dodging Bill in January this year, we have had vocal support from business and faith leaders, academics and economists, politicians from across the political spectrum, and over 60,000 members of the public. Political parties including the Greens, the SDLP and Plaid Cymru have given their backing to the Bill. Now what we need is for the others - including those most likely to lead the next government to step up and promise that they would deliver a Tax Dodging Bill in the first 100 days after the election. It might upset a few vested interests but it has the double advantage that it would be both the right thing to do and immensely popular.

Nick Bryer is Oxfam's Head of UK Policy, Programmes and Campaigns