Tax dodgers biggest barrier to end of poverty?
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Company tax dodging is robbing the world’s poor of billions of dollars each year.
This is an injustice. Currently multinational corporations can cheat the world’s poorest nations of their rightful income, and hide behind a veil of secrecy to pull off the trick.
The best available estimates show that developing countries lose $160 billion in unpaid corporate taxes each year – that’s more than the entire developing world receives in aid. It’s enough money to save the lives of 350 million children every year.
And tax dodging is hurting Australia too – total tax evasion is estimated to cost Australia over $40 billion in lost revenue. That’s enough money to pay for education reforms recommended by the Gonski review, the National Broadband Network and still have change in the billions.
Discussion on the worldwide problem of tax cheats at the G8 summit this year was a welcome step towards transparency and fairness. We need to hold these leading nations accountable for finding solutions and keep this issue on the table ensuring its discussed again at the upcoming G20 summit.
Our next door neighbours East Timor – one of the world’s poorest nations – are missing an estimated $3 billion in revenue due to unpaid corporate taxes. If recovered, these funds could provide desperately needed public infrastructure, schools and hospitals for the East Timorese people.
Globally, greater corporate tax transparency could result in billions of dollars for developing countries to lift themselves out of poverty.
The more money developing countries can collect in their own tax revenue, the less dependent they will be on aid. If multinational companies pay their dues, the world’s poorest nations will be better equipped to sustainably lift themselves out of poverty. It just makes sense, right?
Money that is lost to the developing world in unpaid taxes from companies would be enough to achieve the Millennium Development Goals several times over. That means tackling global hunger, putting every child in school, treating AIDS victims, providing clean water for all, and radically reducing extreme poverty.
It is possible to end extreme poverty in our lifetime. Our world has the resources. And transparency can help ensure those funds reach the right destination and ultimately the people that need it most.
Viv Benjamin is Oaktree's CEO