PM: G8 must tackle tax evasion (From Banbury Cake)

PM: G8 must tackle tax evasion

10:44am Thursday 24th January 2013 in National News © Press Association 2013

Britain will use its year-long presidency of the G8 group of rich nations to push for global action against tax evasion and "aggressive" tax avoidance by wealthy individuals and businesses, Prime Minister David Cameron has said.

In a speech to the World Economic Forum in Davos, Switzerland, Mr Cameron said abuse of tax systems was "an issue whose time has come" and that he wanted to make sure individuals and companies "pay their fair share".

In an apparent swipe at cafe chain Starbucks, whose failure to pay corporation tax in the UK over three years sparked widespread outrage, Mr Cameron said that it was time for businesses to "wake up and smell the coffee" about public anger at tax-avoidance practices which in some cases raised ethical issues.

Speaking to an audience of world leaders, business figures and non-governmental organisations (NGOs) in the Swiss ski resort, Mr Cameron also said he hoped the UK's G8 presidency in 2013 would "put turbo-boosters" under the issue of transparency in developing world economies.

Greater openness about who owns companies and land and the movement of assets and money has "staggering" potential in the fight against poverty, by ensuring a country's resources benefit its people and not just a super-rich elite, he said.

Announcing his plans for the G8 to "drive a more serious debate on tax evasion and avoidance", Mr Cameron said: "This is an issue whose time has come. After years of abuse, people across the planet are calling for more action and most importantly, there is gathering political will to actually do something about it. There's nothing wrong with sensible tax planning, and there are some things governments want people to do that reduce tax bills, such as investing in pensions, start-up businesses or charities. But some forms of avoidance have become so aggressive that I think it is right to say these raise ethical issues and it's time to call for more responsibility and for governments to act accordingly."

Mr Cameron added: "I'm a low-tax Conservative, but I'm not a companies-should-pay-no-tax Conservative. Individuals and businesses must pay their fair share. Any businesses who think that they can carry on dodging that fair share or that they can keep on selling to the UK and setting up ever-more complex tax arrangements abroad to squeeze their tax bill right down - well, they need to wake up and smell the coffee because the public who buy from them have had enough."

TUC general secretary Frances O'Grady said global efforts to tackle avoidance need to be matched by "tougher action" domestically, adding: "We welcome the Prime Minister's commitment to use the G8 Presidency to tackle global tax avoidance."

"The tens of billions of pounds raised would be a fairer and more effective way to tackle budget deficits than endless self-defeating austerity. But tackling tax avoidance at a global level will not work unless the Government takes tougher action closer to home. The UK remains a global leader for tax secrecy, both through the City and its crown dependencies. The Government should start to close the UK's multi-billion tax gap with a far tighter general anti-avoidance principle and minimum tax rates so that the super-rich begin to pay their fair share."

Asked whether the Prime Minister intended to put the spotlight on Starbucks with his reference to companies "smelling the coffee", Mr Cameron's official spokesman told reporters: "I think he was using a commonly used phrase. He was making a point that applies across the board."