Scotland joins countries blocking tax haven-tied corporations from receiving Covid-19 bailouts

26th May 2020 / United Kingdom
Scotland joins countries blocking tax haven-tied corporations from receiving Covid-19 bailouts

By Mark Bou Mansour: The Scottish Government has backed a Green Party amendment to exclude corporations registered in tax havens, or with subsidiaries or other arrangements in tax havens from receiving Covid19 bailouts. To date, Wales, France, Belgium, Denmark, Poland and Argentina have all announced similar measures. A second Green amendment that did not pass would have required corporations, as a condition of receiving a bailout, to provide country by country reporting in order to determine whether the corporation is shifting profit out of the country in order to pay less tax.

Tax justice campaigners from across the UK welcomed the announcement as a good first step but stressed the need for more action to achieve better impact. Following the announcement, Tax Justice UK launched a petition calling on Westminster to take similar measures to ensure bailouts come with conditions attached so companies pay their fair share of tax.

 

The Tax Justice Network released this statement on the vote from Alex Cobham, our chief executive:

“We welcome the Scottish government’s move to block corporations linked to tax havens from getting bailouts. The narrow list of tax havens the measure targets will, sadly, leave the door open to many of the world’s most dangerous corporate tax havens – but it is an important first step. Governments are recognising that they cannot build back better on top of a tax haven trap door. The EU tax haven blacklist, which Scotland and other European countries are relying on to stop Covid-19 bailouts from ending up in tax havens, is based on an old-fashioned notion of tax havens as small, palm-fringed islands and ignores the reality of modern day tax havenry. Many of the biggest corporate tax havens are based right here in Europe. Luxembourg is 11 times more responsible for corporate tax avoidance risks than the EU-blacklisted Seychelles is, as measured by the Corporate Tax Haven Index, and has cost EU members over $12 billion in lost corporate tax a year. The Scottish government must look beyond the EU tax haven blacklist in order to make sure bailouts go towards protecting people’s jobs and wellbeing instead of towards tax havens.”

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“The coronavirus pandemic has exposed the grave costs of an international tax system programmed to prioritise the interest of corporate giants over the needs of people. For years, corporate tax havens like the Netherlands and Luxembourg have fuelled a race to the bottom, handing over wealth and power to the biggest corporations and taking it away from the nurses and public service workers risking their lives today to protect ours.”

“Now more than ever, countries must reprogramme their tax systems to prioritise people’s wellbeing over the interests of the wealthiest corporations. That starts with transparency. Specifically, with requiring corporations to publish their country by country reports to expose those using corporate tax havens to short-change the communities that host, staff and protect their operations. We’re glad to see country by country reporting high up on the agenda in Scotland and urge the Scottish government to adopt the tax transparency measure in order to prevent billions in lost corporate tax.”

 

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