Global leaders to tackle tax evasion at G8 summit, but 'naming and shaming' strategy appears to be shelved
Tax avoidance, which by some estimates costs nations worldwide around $3 trillion a year, will be a major topic at the meeting of leaders of the G8 nations -- United States, United Kingdom, Canada, France, Germany, Italy, Japan, Russia -- which began today at the Lough Erne Resort in Northern Ireland.
With taxes taking a top spot on the two-day international agenda, the eight world leaders get the honor of being this week's By the Numbers pick.
G8 host United Kingdom Prime Minister David Cameron has made no secret that "fighting the scourge of tax evasion" is one of his government's priorities.
UK tax haven deal: Cameron took advantage of the coming global gathering to reach a deal over the weekend with UK territories to clamp down on tax evasion.
Among the jurisdictions often cited as offshore tax havens for those seeking to hide cash are the Cayman Islands in the Caribbean and, closer to 10 Downing Street, the Isle of Man and the Channel Islands of Jersey and Guernsey.
But some of the so-called tax haven leaders aren't pleased to be singled out.
"Politicians love scapegoats," Isle of Man Chief Minister Allan Bell told the BBC. Bell also said that his island is a decade ahead of the UK, the United States and other large nations in tracing the ownership of secret bank accounts.
Corporate tax tricks: Bell also took a verbal slap the the U.S., calling the country "selfish" for focusing on overseas tax havens while showing little enthusiasm for tracking down tax evaders in Delaware.
That state is frequently chosen by U.S. businesses as the one in which to incorporate because of Delaware's less stringent tax and regulatory rules.
The issue of corporate taxes has taken on new urgency globally after revelations -- and public anger -- that companies like Apple and Google had used U.S. and European tax structures that critics contend were contrived to minimize the corporate giant's tax bills.
Naming and shaming shelved: In earlier discussions by European Commission members and tax reform advocates, there were hints that G8 nations might consider requiring that companies publicize when they funnel profits into tax haven countries where they have few staff or sales.
Such so-called naming and shaming would, theoretically, curb tax avoidance.
But the preliminary plan that would ask companies to, on a voluntary basis, report their country-by-country profits, revenues and tax payments reportedly has been watered down.
Most countries already have access to such information, but sharing it could help some developing countries who have expressed difficulties in accessing information about companies outside their territory which they suspect to be involved in siphoning profits from affiliated companies on their territory, reports Reuters.
Not surprisingly, companies have lobbied strenuously against the added reporting, which critics say would not be enough to legally prove tax evasion.
So what will the G8 leaders do about global tax evasion?
When the G8 wraps on Tuesday, we'll have some idea of how tough the leaders will be, or at least how tough they say they'll be, on tax haven countries and those who use them.You also might find these items of interest: