G8 leaders pledge to increase budget transparency

19 Jun 13
The leaders of the Group of Eight leading industrialised nations have committed to publishing ‘easy to read and re-use’ information on budgets and spending.

In the communiqué issued yesterday at the end of their two-day summit in Northern Ireland, the G8 leaders also agreed to automatically share tax information to ‘fight the scourge of tax evasion’.

And they pledged to help developing countries build the capacity and information to collect the taxes owed to them.

The Lough Erne declaration said: ‘Private enterprise drives growth, reduces poverty and creates jobs and prosperity for people around the world. Governments have a special responsibility to make proper rules and promote good governance. Fair taxes, increased transparency and open trade are vital drivers of this.’

As part of this, it said: ‘Governments should publish information on laws, budgets, spending, national statistics, elections and government contracts in a way that is easy to read and re-use, so that citizens can hold them to account.’

Among the other commitments made in the ten-point declaration are to change rules that let companies shift their profits across borders to avoid taxes. Multinationals will be expected to report to tax authorities what tax they pay where, while tax collectors should also be able to easily obtain information on exactly who owns companies.

Building on agreements made between the G8 and resource-rich developing countries at the weekend, the communiqué also includes a commitment to make land transactions transparent and for extractive companies to report all payments they make to governments. Governments should also report the income they receive from these mining companies, it added.

The agreement was criticised by UK trade unions, who claimed it did not go far enough in tackling tax avoidance and fell short of the expectations set by UK Prime Minister David Cameron in the lead up to the summit.

Frances O'Grady, general secretary of the UK Trades Union Congress, said: ‘While some progress has been made on automatic information exchange, the agreement on reporting profits to tax authorities is so weak it is bordering on irrelevance.

‘Despite the high profile pre-summit lobbying, the British Crown Dependencies appear to have outmanoeuvred the G8 nations and got tax havens out of the agreement altogether.

She added: ‘We fear the declaration’s warm platitudes and hazy rhetoric will be far too easy for global companies to skirt around. Yet another opportunity has been missed to finally get to grips with global tax avoidance and evasion.’

Marta Foresti, head of politics and governance at the Overseas Development Institute think-tank, also claimed the communiqué should have gone further.

‘On tax, the communiqué falls short of delivering hopes for commitments on open registries on beneficial ownership. The language focuses heavily on the word “should”,’ she said.

‘On extractives, the G8 falls back on what is already in place: Extractive Industries Transparency Initiative, US and European Union legislation.  The ball is now in the corners of the EU and the Organisation for Economic Co-operation and Development to make sure many of these steps are actually implemented.’

Did you enjoy this article?

Read more about

Related articles

Have your say


CIPFA latest

Most popular

Most commented

Events & webinars