Now that Cameron supports tax justice, what must he do about it?

We can’t just rely on companies cleaning up their tax affairs. We need international, intergovernmental action on tax justice, and the UK should deliver it.

When the Prime Minister stands in front of television cameras and uses your campaign slogan, you know something is happening.

On Tuesday in County Armagh, setting out his priorities for the G8 summit that the UK will host next June, David Cameron put the fight against tax dodging at the top of his international agenda:

“I want to us to achieve tax justice in our world, so that big companies pay their taxes”.

The focus on tax is not entirely a surprise. This year’s mountain of news stories about big companies accused of not paying their fair share is reaching a breaking point. But tax justice is bigger than Starbucks, Amazon or Google. The clever accounting that allows some companies to opt out of the tax system – both in the UK and in some of the poorest countries in the world – is made possible by two features of the international system itself.

This is why Cameron putting tax justice on the international agenda marks a new, important and hopeful shift in the government’s previously underpowered response to the global haemorrhage of public revenues.

First, international tax rules are desperately ill-equipped to meet the challenges of globalised business. They are powerless to stop profits being shifted into tax havens, and out of the countries where real sales are made, real people employed, real goods produced. Last week’s public scrutiny of UK high-street companies has lifted the lid on a bizarre world of goods bought via Swiss subsidiaries, and management services purportedly provided by firms operating from a post-box in the Cayman Islands. This world is dishearteningly familiar to ActionAid researchers, who have traced how multinational companies have used exactly the same strategies (pdf) to shrink their tax bills across Africa and Asia. The tax avoided by just one UK-headed multinational we investigated could, we estimate (pdf), pay to put a quarter of a million children in school in the developing countries where that company operates.

Second, this profit-shifting is possible and profitable thanks to the abusive offshore tax regimes of tax havens (pdf), whose secrecy rules also confound tax inspectors’ attempts to unpick clever accounting tricks, or to locate wealth simply stashed illegally in shell companies and anonymous trusts. Tax havens are not just a drain on scarce public finances. They are an affront to democracy, a deliberate block on legitimate governments’ efforts to raise their own revenues and prevent the corrupt theft of public funds.

On both counts – rebalancing the rules and shutting the tax havens – international agreement and concerted diplomatic muscle is needed. The G8 has come under criticism in recent years. But it remains unusually well-placed to push real international tax reform and prise open the tax havens – 40 per cent (pdf) of which are closely linked to the G8 countries themselves.

How could this be done? First, the G8 could use its weight to make tax havens disclose the wealth and assets that foreign companies and individuals funnel into their jurisdictions. The agreements to do this already exist. Tax havens should sign them, or face serious financial countermeasures. Second, we need to unlock the corporate "black boxes" into which tax haven-held assets are currently stuffed. To tear down the veil of offshore secrecy we need a legally-binding global standard, simply requiring the real, human owners of anonymous companies and trusts – their "beneficial ownership" – to be put on public record. A transparency convention with this standard at its heart, launched and signed by the G8, would be a game-changer not just for tax revenues, but for the fight against corruption, money-laundering and international crime – making us better-off, and keeping us safer.

And finally, Cameron has stressed that the G8’s approach to global injustice cannot be about "rich countries doing things to poor countries". It must be about "us putting our own house in order and helping developing countries to prosper". The spring clean must start at home. Before we get to Lough Erne in June, the UK’s own tax avoidance regime needs to be made fit for purpose: capable of protecting UK revenues, and closing the UK tax loopholes (pdf) that leach money out of developing countries too. The budget next spring is the place to do it.

This is a fight that could transform the UK’s public finances, ensure that scarce UK aid is not undermined by the haemorrhage of developing countries’ revenues, and ultimately allow those countries to fight poverty and hunger with their own resources. In Fermanagh next year we must seize the opportunity with both hands.

Image: ActionAid

Mike Lewis is a tax justice campaigner at ActionAid

Felipe Araujo
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Manchester's Muslim community under siege: "We are part of the fabric of this nation"

As the investigation into last week's bombing continues, familiar media narratives about Islam conflict with the city's support for its Muslim population.

“You guys only come when something like this happens,” said one of the worshippers at Manchester's Victoria Park Mosque, visibly annoyed at the unusual commotion. Four days after the attack that killed 22 people, this congregation, along with many others around the city, is under a microscope.

During Friday prayers, some of the world’s media came looking for answers. On the eve of Ramadan, the dark shadow of terrorism looms large over most mosques in Manchester and beyond.

“People who do this kind of thing are no Muslims,” one man tells me.

It’s a routine that has become all too familiar to mosque goers in the immediate aftermath of a major terror attack. In spite of reassurances from authorities and the government, Muslims in this city of 600,000 feel under siege. 

“The media likes to portray us as an add-on, an addition to society,” Imam Irfan Christi tells me. “I would like to remind people that in World War I and World War II Muslims fought for this nation. We are part of the fabric of this great nation that we are.”

On Wednesday, soon after it was revealed the perpetrator of last Monday’s attack, Salman Ramadan Abedi, worshipped at the Manchester Islamic Centre in the affluent area of Didsbury, the centre was under police guard, with very few people allowed in. Outside, with the media was impatiently waiting, a young man was giving interviews to whoever was interested.

“Tell me, what is the difference between a British plane dropping bombs on a school in Syria and a young man going into a concert and blowing himself up,” he asked rhetorically. “Do you support terrorists, then?” one female reporter retorted. 

When mosque officials finally came out, they read from a written statement. No questions were allowed. 

“Some media reports have reported that the bomber worked at the Manchester Islamic Centre. This is not true,” said the director of the centre’s trustees, Mohammad el-Khayat. “We express concern that a very small section of the media are manufacturing stories.”

Annoyed by the lack of information and under pressure from pushy editors, eager for a sexy headline, the desperation on the reporters’ faces was visible. They wanted something, from anyone, who had  even if a flimsy connection to the local Muslim community or the mosque. 

Two of them turned to me. With curly hair and black skin, in their heads I was the perfect fit for what a Muslim was supposed to look like.

"Excuse me, mate, are you from the mosque, can I ask you a couple of questions,” they asked. “What about?,” I said. "Well, you are a Muslim, right?" I laughed. The reporter walked away.

At the Victoria Park Mosque on Friday, Imam Christi dedicated a large portion of his sermon condemning last Monday’s tragedy. But he was also forced to once again defend his religion and its followers, saying Islam is about peace and that nowhere in the Koran it says Muslims should pursue jihad.

“The Koran has come to cure people. It has come to guide people. It has come to give harmony in society,” he said. “And yet that same Koran is being described as blood thirsty? Yet that same Koran is being abused to justify terror and violence. Who de we take our Islam from?”

In spite of opening its doors to the world’s media, mosques in Britain’s major cities know they can do very little to change a narrative they believe discriminates against Muslims. They seem to feel that the very presence of reporters in these places every time a terror attack happens reveals an agenda.

Despite this, on the streets of Manchester it has proved difficult to find anyone who had a bad thing to say about Islam and the city’s Muslim community. Messages of unity were visible all over town. One taxi driver, a white working-class British man, warned me to not believe anything I read in the media.

“Half of my friends are British Muslims,” he said even before asked. “ These people that say Islam is about terrorism have no idea what they are talking about.”

Felipe Araujo is a freelance journalist based in London. He writes about race, culture and sports. He covered the Rio Olympics and Paralympics on the ground for the New Statesman. He tweets @felipethejourno.

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