Despite the Syria dispute overshadowing the G20 Summit’s focus on the economy, participants are trying to forge a united front on growth, trade, banking transparency and tax – getting companies to pay their fair share of contributions to governments’ treasuries.
The leaders of developed and developing nations are set to back a plan to crackdown on global tax evasion and avoidance.
James Franey. the euronews correspondent at the gathering at St Petersburg in Russia said: “The business world has long argued that it is simply putting shareholders first by exploiting fiscal loopholes and shifting profits overseas. But with government finances under such strain, leaders here have decided it’s time to get tough on the tax evaders.”
The Organisation for Economic Cooperation and Development’s top tax official Pascal Saint-Amans, told us corporate tax loopholes distort the world’s economy: “The point is that you need to have fair competition. You don’t need to have a system where because you get organised and you play on the existing rules you pay taxes nowhere because that you put all your intangible property, the value, your assets in no-tax jurisdiction where you have no activity. This is not fair competition. This is unfair. This is not good for growth and this is not good for the economy and that’s why we are tackling this.”
Saint-Amans told euronews that there is a “consensus amongst the G20 to take very significant steps” towards automatic exchange of information to target individual tax dodgers and stop companies moving their profits overseas to avoid tax.
“People cannot accept to pay more taxes when some don’t,” he said, adding that an automatic exchange deal is “the end of bank secrecy”.
The G20’s focus on this issue follows a series of scandals involving companies – such as Apple, Amazon, Starbucks and Google – who have been accused of aggressively exploiting cross-border loopholes to lessen their tax burden.
The European Commission has estimated that tax dodging – both legal and illegal – costs the EU one trillion euros annually.