Fight corporate tax avoidance

YOU are right to draw attention to the questionable tax planning practices of multinational companies, and the lack of action to tackle the problem of global tax dodging (“Action need to tackle tax havens”, Herald editorial, July 18).

Sadly the use of tax havens, loopholes and opaque deals to drive down tax bills is common practice among many large multinationals across the globe. And it is poorer countries that are the worst affected. The IMF estimates that developing countries lose a staggering £151 billion to corporate tax avoidance a year, leaving hospitals, schools and other key public services starved of resources.

The principles of the international tax system are 100 years old and out of date. Reform efforts at both UK and OECD level have been little more than a sticking plaster. If corporate tax avoidance is to be tackled in rich and poor countries alike then major surgery is needed.

The UK and Scottish governments must work together to ensure that the UK’s tax policies do not hold back the world’s poorest countries in their fight against poverty. What is needed is bold action to end the race to the bottom on corporate tax rates, tackle tax havens, and stop companies artificially shifting profits around the world to cut their tax bill. Charlie Matthews, Senior Advocacy Adviser, ActionAid UK, 33-39 Bowling Green Lane, London.