By Mark Smulian | 24 September 2013

Clamping down on tax avoidance is fundamental to fighting world poverty, the international development charity Action Aid has told the United Nations General Assembly.

In a briefing timed to coincide with the general assembly meeting in New York this week, the charity said that stamping out tax avoidance and unfair tax deals in the world’s poorest countries would be key to plans to fight poverty after the Millennium Development Goals expire in 2015.

Some $300bn is lost every year by developing countries through a combination of corporate tax avoidance and tax deals Action Aid said, equivalent to twice the amount spent on aid last year.

This money could instead help finance education, health and sanitation programmes it said in the briefing paper Post 2015: business as usual or bending the arc of history.

Action Aid international advocacy co-ordinator Sameer Dossani said: ‘At present the tax system is failing many developing countries. They are suffering because of bad international tax treaties and rampant tax avoidance and they face huge pressure from large corporations to give unnecessary tax breaks.

‘Reforming the global tax system is one of the most powerful potential weapons in the international arsenal. 

‘The OECD have acted, the G8 have acted and the G20 have acted. Now it is time for the UN to do the same,’ he said.

Dossani added: ‘The United Nations now needs to be more ambitious. It needs to raise its game and raise its [$1.25 a day income] extreme poverty benchmark.’