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Opinion: Tax avoidance hits the poorest hardest

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The Guardian
Monday 4 January 2016 18.16 GMT

The news that Apple will pay £234m to settle an Italian tax dispute (Report, 31 December) is a powerful reminder of the scale of the challenge when it comes to making sure companies pay a fair amount of tax.

But stories like this, involving major corporations in rich countries, often hide the reality that it is the world’s poorest people who are worst affected by tax-dodging. Apple’s settlement is dwarfed by the $200bn that IMF research estimates that developing countries lose to corporate tax avoidance every year – much more than rich countries give in aid. Women and children in poor countries are often the hardest hit as services like health and education are left short of funding.

The international tax system has failed to keep up with corporate tax planning and the reforms being pushed by the G20, OECD and other wealthy nations fall short of what developing countries need. Tough new rules are required to increase corporate transparency, end the race to the bottom on corporate tax rates, and stop profit-shifting into tax havens.
Anders Dahlbeck
Tax justice policy adviser, ActionAid UK

• The “delusion” not mentioned by Richard Wolffe in his piece (The race for the White House is powered by delusion, 4 January) is “the American dream”, a dream that many may see embodied by Donald Trump, but, because of the increasing elitism in the country, others are just waking up to understand it is a dream of a memory. That elitism now raises a few dozen young celebrities to stardom, a few hundred young entrepreneurs to riches and a few thousand young people via Ivy League colleges to run the show, while leaving millions of others far behind, is only slowly being understood. As recently as 2007 a majority of the very poorest US voters were in favour of abolishing inheritance tax (“estate tax”) despite the fact that less than 1% pay such taxes.
David Murray
Wallington, Surrey

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