Written by Viv Benjamin, Oaktree’s CEO
Company tax dodging is robbing the world’s poor of billions of dollars each year.
This is an injustice. Currently multinational corporations can cheat the world’s poorest nations of their rightful income, and hide behind a veil of secrecy to pull off the trick.
The best available estimates show that developing countries lose $160 billion in unpaid corporate taxes each year – that’s more than the entire developing world receives in aid. It’s enough money to save the lives of 350 million children every year.
And tax dodging is hurting Australia too – total tax evasion is estimated to cost Australia over $40 billion in lost revenue. That’s enough money to pay for education reforms recommended by the Gonski review and the National Disability Insurance Scheme, and still have billions left over.
The Government’s latest announcement to expose tax cheats is a welcome step towards transparency and accountability. New legislation could help ensure multinational corporations do not get away with tax dodging without being exposed.
Our next door neighbours East Timor – one of the world’s poorest nations – could benefit from these reforms. They’re missing an estimated $3 billion in revenue due to unpaid corporate taxes. If recovered, these funds could provide desperately needed public infrastructure, schools and hospitals for the East Timorese people.
Globally, greater corporate tax transparency could result in billions of dollars for developing countries to lift themselves out of poverty.
The more money developing countries can collect in their own tax revenue, the less dependent they will be on aid. If multinational companies pay their dues, the world’s poorest nations will be better equipped to sustainably lift themselves out of poverty. It just makes sense, right?
In a few weeks time, I and one thousand other diverse young Australians will road trip to Canberra as part of an Oaktree campaign to ensure our government keeps its promises on foreign aid. We know that good aid works – last year Australian aid saved at least 200,000 lives and put over half a million children in school around the world. But as a South African Cabinet Minister, Trevor Manuel said, “It is a contradiction to support increased development assistance yet turn a blind eye to actions by multinationals and others that undermine the tax base of a developing country.”
Money that is lost to the developing world in unpaid taxes from companies would be enough to achieve the Millennium Development Goals several times over. That means tackling global hunger, putting every child in school, treating AIDS victims, providing clean water for all, and radically reducing extreme poverty.
It is possible to end extreme poverty in our lifetime. Our world has the resources. And transparency can help ensure those funds reach the right destination and ultimately the people that need it most.
Viv Benjamin is CEO of the Oaktree Foundation, Australia’s first and largest youth-run aid organisation. Oaktree is running the Roadtrip to End Poverty from March 9 to 16, mobilising over 1,000 youth ambassadors for action on global poverty.