Result of a new research has shown that the greatest enabler of corporate tax avoidance in ethw world is the UK and its “corporate tax haven network”.

Among the top 10 places that have been most active to “proliferate corporate tax avoidance” on the corporate tax haven index, the British territories and dependencies accounts for four places.

This report was published in the Tax Justice Network which also placed the UK at 13 position in the list.

The fact that the government’s record on tax avoidance was “embarrassing and shameful” is showed by the findings, said the shadow chancellor, John McDonnell.

“The only way the UK stands out internationally on tax is in leading a race to the bottom in creating tax loopholes and dismantling the tax systems of countries in the global south. The rot has to stop. While Tory leadership hopefuls promise tax giveaways for the rich, a Labour government will implement the most comprehensive plan ever seen in the UK to tackle tax avoidance and evasion,” McDonnell added.

The UK had “been at the forefront of international action to reform global tax rules” and has followed policies of tackling tax avoidance with priority, a government spokesman told the media.

The degree to which it enables corporate tax avoidance forms the primary basis of evaluation of countries for the index. Along with this, the index also considers the scale of its corporate activity which is to determine the share of the country to the global corporate activity which is put at risk of tax avoidance because of the country.

The British Virgin Islands heads the list and is closely followed by Bermuda and the Cayman Islands all of which are British overseas territories.

Jersey, a crown dependency, was seventh on the list just behind the Netherlands, Switzerland. The rest of the top ten countries comprise of Luxembourg, Singapore, the Bahamas and Hong Kong.

A major share of the responsibility for the “breakdown of the global corporate tax system” was accorded to the UK by the network which said that this was derived at with the help of its network of satellite jurisdictions.

“The UK, with its corporate tax haven network, is by far the world’s greatest enabler of corporate tax avoidance and has single-handedly done the most to break down the global corporate tax system, accounting for over a third of the world’s corporate tax avoidance risks. That’s four times more than the next greatest contributor of corporate tax avoidance risks, the Netherlands, which accounts for less than 7%,” it added.

The network said that there are 46 jurisdictions in the index and is created on the basis of a corporate tax haven score which shows the aggressiveness of policies utilized for tax cuts, loopholes, secrecy and other mechanisms so that they are able to attract multinational companies. The index is also based on a global scale weight which shows the position and size of the country or territory in the cross-border activity.

(Adapted from TheGuardian.com)

Categories: Creativity, Economy & Finance, Geopolitics, Regulations & Legal, Strategy, Sustainability, Uncategorized