Letters: Shedding light on tax evasion:

Letters: Shedding light on tax evasion

By The Guardian newspaper: Editorials & reply | guardian.co.uk • February 9, 2009

As a Manxman, the expression “pot calling the kettle black” came to mind while reading the article on tax (From the high street to a tax haven, 9 February). At a recent meeting in the Isle of Man - addressed by John Christensen of the Tax Justice Network and Malcolm Couch, assessor of income tax for the Manx government - both speakers agreed that the money-laundering centre cum tax haven of international choice is the City of London. There was general agreement that coordinated international action would be needed to do anything effective about tax evasion.

Whatever shenanigans may be going on in the Isle of Man, some of the points made by those attacking it at present are not justified. For instance, the statement in your report that “Manx islanders pay only a token contribution towards defence” is a bit rich in view of the fact that the contribution made by Manx people to the British forces in the two world wars was disproportionate to the island’s population. It says a lot that the monies paid by the Isle of Man for “defence” were called “the imperial contribution” until recently. We’re only just shaking off our colonial status. My fear is that the Isle of Man might be unjustly punished for any real or imagined sins in a token gesture against tax evasion.
Dr Brian Stowell
Douglas, Isle of Man

So a source for Her Majesty’s Revenue and Customs says that fewer than 100 inspectors are tackling tax avoidance, compared with thousands of professionals advising companies on how to do it. And while HMRC is in the process of making 25,000 jobs cuts, Roger Jenkins earns more than £40m heading the Barclays tax team (The top poacher and the gamekeeper, 6 February).

However, your laudable coverage on this issue underestimates the gap between what companies might be expected to pay in tax and what they actually pay as between £3bn to almost £14bn. Tax experts, adding together revenue lost in evasion, avoidance and uncollected tax, put the figure at a staggering £100bn. And developing countries lose an estimated £250bn a year as a direct result of corporate tax dodges.

If Brown really wants to make poverty history, he should act now to end this corporate tax scandal.
Simon McRae
Senior campaigns officer, War on Want

I have just returned from a visit to four independent Commonwealth states in the Caribbean, and there is some resentment there at perceived UK hypocrisy over tax havens. Companies, using UK-dependent territories, may or may not be avoiding UK tax on a large scale. But the independent states have done much to clean up fraud and improve transparency. Some six years ago, for example, the regulator in Grenada closed down 20 bogus banks in a month.

With the loss of preference for sugar and bananas, Caribbean states were encouraged to move into financial services to provide jobs. When the OECD complained of unfair competition, the Commonwealth Secretariat and the World Bank, with a taskforce led by the then prime minister of Barbados, met legitimate concerns while challenging misunderstandings and the big stick.

If the UK wants to cut down on tax avoidance, it should set an example where it has direct responsibility.
Richard Bourne
Senior research fellow, Institute of Commonwealth Studies

As Polly Toynbee pointed out (Comment, 31 January), many of the companies covered in your series on the Tax Gap claim to be “leaders” in corporate social responsibility. Indeed AstraZeneca, Diageo and GlaxoSmithKline have all featured in recent years in the list of the top 10 CSR companies produced by Ethical Investment Research Services.

Companies that go to considerable lengths to find legal ways of avoiding paying their workers the minimum wage should not be considered socially responsible. It is high time that the operational definition of CSR was extended to include responsibility for sharing in the tax burden. This would then make the CSR reports of these companies much more interesting reading.
Professor Rhys Jenkins
School of development studies, University of East Anglia