In the green hills of County Fermanagh, Northern Ireland, the world’s leading developed nations agreed on Tuesday to make individuals and companies pay the taxes that they owe. With the release this morning of the Lough Erne Declaration the G8 countries plan to implement greater tax collection internationally through fairer tax policies, greater financial transparency, and open trade.
The G8 plans to clamp down on tax-evaders and require shell companies — often used to take advantage of tax loopholes or to invest money anonymously—to identify their effective owners or primary beneficiaries. Developing countries, reported CNN, lose more in tax avoidance than they receive in aid. With the protocols agreed to today, indebted poor countries will be given access to the global information they need to collect the taxes they are owed.
Some anti-poverty campaigners describe the G8 deal as a historic achievement.
“The G8’s work to curb corporate tax avoidance is awesome,” said Eric LeCompte, executive director of Jubilee USA Network, in a news release. “I think we wold like to see even greater moves for corporate transparency, but the foundation theG8 built will take us into a more accountable corporate world than we’ve seen before.”
Laura Taylor, public policy director at TearFund, questioned the clarity of the Lough Erne Declaration. “… If it's a concrete promise from all eight countries on all of those things, let the hallelujahs sound. It's about time we saw global mandatory reporting for oil, gas and mining industries, for example … If this is their way of announcing that they’ll do it, it’s been a superb G8. If not, we’ve still got a long way to go.”
U.K. trade unionists are disappointed in the measures. “While some progress has been made on automatic information exchange,” said Frances O’Grady, general secretary of the Trade Union Organisation in a statement, “the agreement on reporting profits to tax authorities is so weak it is bordering on irrelevance. … We fear the declaration’s warm platitudes and hazy rhetoric will be far too easy for global companies to skirt around. Yet another opportunity has been missed to finally get to grips with global tax avoidance and evasion.”
Last year Bono, the lead singer of U2 and co-founder of the ONE Campaign, took on the issue of financial transparency in his address to the G8 Symposium on Global Agriculture and Food Security in Washington, D.C.
“Isn’t transparency the vaccine to prevent the worst disease of them all? Corruption. Everybody here knows that corruption kills more children than HIV/AIDS and malaria combined,” he said. “So that’s what I want to leave you with. That very simple word. That very simple concept. Easy to say. Much harder to realize, especially in law. The word ‘transparency.’”
As the G8 advances financial responsibility, oversight, and transparency it will be up to the world’s moral and religious community to hold them accountable. Remember, Jesus said, “There is nothing hidden that will not be disclosed, and nothing concealed that will not be known or brought out into the open” (Luke 8:17).
Rose Marie Berger is a senior associate editor at Sojourners magazine.
Image: World map, Feraru Nicolae / Shutterstock.com