Written by: Keith Tully
Reviewed: Thursday 27th June, 2013
Chancellor George Osborne vowed to crack down on tax avoidance and all leaders of the G8 summit have now agreed on new tax evasion measures.
All nations including the UK, USA, France, Italy, Japan, Canada, Russia and Germany, have come to an agreement to clamp down on money launderers, illegal tax evaders and corporate tax avoiders.
Mr Osborne said that more progress has been made in the past 24 hours than it has over the past 24 years, in terms of tackling tax secrecy.
The new measures require offshore shell companies, which are often used to exploit tax loopholes, to reveal the beneficiary owners; and all governments have agreed to give each other access to information on their residents’ tax affairs. What’s more, all multinationals must tell tax authorities what taxes they are paying and where.
It is hoped that the new procedures will combat illegal evasion of taxes and the legal tax avoidance by various global companies such as Google, Starbucks and Vodafone.
Earlier in the day the Chancellor had unveiled plans to set up a UK register of companies and their owners to make it more transparent on who was financially gaining from such arrangements.
He said the goal was to make the international tax system- which was created in the 1920s- fit for the 21st century, and that it needed reform to take account of the digital age.
It was also revealed that many big mining firms have been using complex ownership structures in Switzerland and the Netherlands to avoid paying tax on extracted minerals from developing countries.
Mr Osborne told the Today programme: “We want to make sure that big international companies, whose identities are well known, pay their fair share of taxes where the profits are generated, and individuals do not use the global financial system to hide their wealth and evade paying taxes where they should.”
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