The Tax Justice Network said states are depriving themselves of $89bn (£75bn) a year by allowing some of the world’s biggest companies anonymity about how they conduct their tax affairs. In its State of Tax Justice 2022 report, TJN called for an end to the concession made to multinationals that they would not be named and shamed if they provided information about shifting profits to tax havens as part of a global initiative – country by country reporting – led by the Organization for Economic Co-operation and Development. Some individual companies have voluntarily made their country-by-country reports public, and the TJN said that by its calculations, governments could recoup 28% of the $316 billion lost to cross-border “tax abuse” in 2021 if the loss of anonymity light on the activities of all multinationals. The UK introduced a law in 2016 to make the country-by-country reports public, but never used the power and the idea was abandoned in 2020 by Rishi Sunak when he was chancellor. Last year, according to TJN estimates, the UK lost £27bn to multinationals paying lower tax. Rachel Etter-Phoya, senior researcher at the Tax Justice Network, said: “The OECD’s concession to corporate tax abuse is a political choice to turn a blind eye. Our governments patronize us by talking about taking “tough decisions” to deal with the global cost of living crisis and then choose to remain silent about multinational corporations who have privately admitted to defrauding the public out of billions in taxes. “They choose to protect the icing on the cake of the richest companies while people worry about putting food on the table. Our message to governments is clear: stop the cover-up, to raise living standards. “As far as multinational companies are concerned, we call on you to get your taxes straight. If you have nothing to hide, if you are paying your fair share at a time when people are feeling the pinch, publish your country-by-country reports.’ A government spokesman said: “The UK has been at the forefront of international tax reforms, which include adopting the OECD country-by-country minimum standard and leading the discussions to reach the historic global tax agreement last year. Subscribe to Business Today Get ready for the business day – we’ll point you to all the business news and analysis you need every morning Privacy Notice: Newsletters may contain information about charities, online advertising and content sponsored by external parties. For more information, see our Privacy Policy. We use Google reCaptcha to protect our website and Google’s Privacy Policy and Terms of Service apply. “Publishing country-by-country reports is unlikely to generate the additional tax revenue suggested by the Tax Justice Network, because HMRC already receives these reports annually from multinationals and uses them in their compliance work.”
