Jan 24 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 said: "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."
Poor business practices not only deprive the public sector of the revenue it needs to fund essential services, but also harm responsible firms, he said.
"When some cowboys play the system, all businesses suffer the fall-out to their reputation. That's why it's not just those in the NGOs who have been lobbying my Government on these issues, it's those in the high-rises of the City of London - bankers, lawyers, senior figures in finance. They've told us to pursue this agenda hard, and that's what we're going to do."