As David Cameron selects his new Government, he knows they will face issues of our struggling NHS, high rates of unemployment and budget deficit. The new appointees will certainly need true grit to tackle these problems and fulfil the expectations of the British public.
Standing in the way of solving these problems is a hidden enemy. It is a disease spreading the nation, a ruthless plague that refuses to differentiate between its victims, one that puts both the UK and developing countries in jeopardy. This disease I refer to is that of Tax Avoidance.
My name is Joanna, and as a doctor and a passionate believer in the NHS, I have a particular interest in the devastating effect that tax avoidance has on health. I have had a strong interest in health and its inequalities in developing countries. That is why I want to make sure our new UK government does not forget about tackling tax avoidance.
Although it is illegal to evade tax (the practice of purposely avoiding paying one's true tax liability through fraud), it is currently not against the law to avoid or 'dodge' tax (the practice of arranging one's finances to reduce tax liability). Despite the disparity in dictionary definitions, both tax evading and tax dodging share the ability to harm the UK economy, steal money away from our essential services and perhaps most despicably, from the poorest people in the world.
The large corporations which purposely dodge tax do so by acting as any opportunistic infection does: they find the weakest points of the system to attack. In tax terms, this includes three main methods. Firstly, large companies can use loopholes in the UK tax system to shift profits into tax havens in the form of loans and transfers. Secondly, tax dodgers route money through countries that they know have unfair tax treaties which also tend to be the poorest and are left with little right to tax this money, pushing them further into the depths of poverty. The final method of dodging
tax is to use harmful tax breaks that don't benefit society such as deductions, exemptions and tax credits. All this simply leads to increased profits for large companies, much of which, in turn, is paid to shareholders.
Incomprehensible sums of money are lost through tax dodging. This is money that could be used to make political promises a reality. This is money that could be used to help save our NHS, reduce unemployment and reduce the budget deficit. This is money that could be used to help those who are most desperately in need.
Developing countries lose an estimated $160 billion every year through tax avoidance. To put this into perspective, that is greater than all overseas aid donated by all governments globally. Yet knowing this, tax dodgers still continue to lighten their tax load by burdening the poor, methods of which have been referred to by Raymond Baker, Director of Global Financial Integrity, as the "ugliest chapter in global economic affairs since slavery".1
A vast proportion of foreign aid is used to improve health infrastructure and resources in less developed countries. The impact on health in developing countries if tax dodging were to be prevented is almost too great to contemplate. However, if it were to be summed up in one shocking statistic, the $160 billion of foreign aid lost to tax dodgers could provide vaccinations against common communicable diseases for every baby born in sub-Saharan Africa for the next 10,000 years.
We have a responsibility to fight against tax avoidance as we do with any spreading infectious disease in the health profession, by taking radical measures to reduce the risk that disease poses on the UK and global population. This involves closing loopholes that allow the 'disease' to spread, creating strict rules to prevent infection, and treating the already infected appropriately. This requires a radical reform of current tax law both nationally and globally.
The Tax Dodging Bill campaign was launched at the beginning of this year, calling upon whoever forms the next Government to introduce a Tax Dodging Bill in the first 100 days after the election. Such a bill would make it harder for large companies to avoid UK taxes and prevent them from getting unfair tax breaks. It would close loopholes which currently encourage big companies to use tax havens and avoid tax in developing countries. Finally, it would make the tax regime in the UK more transparent and tougher on tax dodging. These measures could raise around £3.6 billion in tax to
develop our essential services and fight poverty in the UK. Furthermore, it would raise billions of pounds to fight poverty and disease in some of the poorest countries in the world.
We cannot stand by and continue to allow tax dodgers to get away with not paying their fair share. We must act to treat, tackle and prevent the ruthless disease of tax dodging, which preys on the weak and makes the strong stronger. We must stop this corporate plague in its tracks. Please support the Tax Dodging Bill and sign the petition at: http://www.oxfam.org.uk/get-involved/campaign-with-us/find-an-action/tax-dodging-bill.
Dr Joanna Betterton
Portsmouth Hospitals NHS Trust
- Mosselmans, B 2014. How tax evasion perpetuates world poverty. Beaver Online (accessed 30/04/15)