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New tax loophole will cost UK £1bn

March 6th 2012
Originally published in Liberal Conspiracy

Ahead of the most important austerity budget in a generation, the government plans to open up a huge new tax loophole that will cost ordinary people around the world billions warns ActionAid in a new report ‘Collateral Damage’.

The international development charity has revealed that this loophole will allow UK based multinationals to avoid an estimated £4 billion worth of taxes in developing countries and will also cost the UK Treasury £1 billion.

Until now, the UK’s anti-tax haven rules have provided a deterrent to companies seeking to avoid paying taxes in Britain and poor countries alike. The proposed changes will make it easier and more lucrative for UK companies to dodge tax in developing countries.

A recent UK opinion poll commissioned from YouGov by ActionAid also shows strong demand for tougher government action on corporate tax avoidance with 79% saying the government isn’t doing enough to tackle tax avoidance.

The results revealed widespread support across the political spectrum and in all regions.

· 74% of Conservative voters, 83% of Labour voters and 87% of Liberal Democrat voters said the government should be doing more tackle tax avoidance.
· 72% said that companies that use legal loopholes to avoid their tax bills in the UK or developing countries were behaving irresponsibly.

Martin Hearson, Campaign Manager at ActionAid said:

If the government waters down these rules in the March budget it could inflict huge collateral damage on poor countries like Zambia, Ghana and Tanzania who desperately need that money to fund doctors, nurses and teachers and to ultimately help lift them out of poverty.

And with a cost to the UK of £1billion – everyone loses out.

ActionAid is calling on the Government to make a full assessment of the changes’ impact on developing countries, and to take steps to mitigate any harm, before they become law.

You can sign the Action Aid petition and email your own MP to add support.

From a press release

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