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  • Sep 18, 2014
  • Updated: 6:10am
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Offshore tax havens like Hong Kong contribute to poverty, says ActionAid

Charity says top UK firms, including HSBC, are helping 'siphon' funds to places like Hong Kong

PUBLISHED : Tuesday, 14 May, 2013, 12:00am
UPDATED : Tuesday, 14 May, 2013, 4:26am

The widespread use of offshore tax havens such as Hong Kong by nearly all 100 of the largest British-listed companies, including HSBC and Standard Chartered, may contribute to world poverty and raise the risk of tax evasion, says British charity ActionAid.

It found 36 per cent of HSBC's 1,527 subsidiaries are based in tax havens, including 91 HSBC subsidiaries in Hong Kong, while 45 per cent of Standard Chartered's 317 subsidiaries are also in tax havens, including 27 of them in the special administrative region.

Hong Kong is a haven for 523 subsidiaries of FTSE 100 companies such as Glencore International, while Macau is a haven to 12 subsidiaries, ActionAid says.

Reacting to ActionAid's report, an HSBC spokesman said: "HSBC applies the spirit and letter of the law in all territories in which it operates and seeks to comply with the UK Code of Practice for Taxation of Banks."

HSBC applies the spirit and letter of the law in all territories in which it operates and seeks to comply with the UK Code of Practice for Taxation of Banks

The bank said it expected its customers to be tax-compliant and did not bank with customers if it suspected or knew clients were evading their tax obligations. "HSBC deals in an open and transparent manner with all tax authorities."

In April, the French government launched an investigation into whether HSBC offered illegal products to help French clients avoid tax in Switzerland.

"The US$9.3 billion we paid in tax globally last year demonstrates we do not employ a strategy to avoid UK or other taxes," said the HSBC spokesman.

Standard Chartered did not reply to queries from the South China Morning Post.

An overwhelming 98 of the FTSE 100 companies had firms in tax havens and nearly 40 per cent of all FTSE 100 subsidiaries were registered in tax havens, said ActionAid. It added that 78 of the FTSE 100 firms do business in developing countries.

"Tax havens are one of the biggest hidden obstacles in the fight against global poverty," said Mike Lewis, ActionAid's tax justice policy adviser. "Poor countries lose three times more money to tax havens than they receive in aid each year. Stopping wealth being siphoned out of the poorest countries into tax havens is one of the most urgent tasks."

ActionAid admitted the presence of subsidiaries in tax havens is not proof of tax avoidance and said it was not accusing FTSE 100 companies of tax evasion.

But these firms' extensive operations in tax havens reduce transparency in their taxes and public revenues in poor countries were being undermined, it said.

Fighting tax avoidance was a key priority for Britain, which assumes presidency of the G7 and G8 this year, Chancellor of the Exchequer George Osborne had said at the closing of the G7 meeting on Saturday.

"We discussed the development of a new multilateral global standard on the automatic exchange of information and action to improve the transparency of legal structures. It's vital that both developed and developing countries can collect the tax that is due to them," said Osborne.

In a tweet the same day, Osborne said: "Good talks on tax avoidance and evasion. There's definitely the will to sort it. Not going to let this drop."

In the lead-up to a European Council meeting on May 22, EU tax commissioner Algirdas Semeta will urge it to agree on legislative measures to fight tax fraud within the bloc and globally. The council is expected to adopt a proposed EU Action Plan against tax fraud.

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johnyung
Totally agree, but people like him believes everyone should be on welfare and pay people like him to dictate policy while he eats in Michelin star restaurant, fly first class and stay at 5 star hotels. Why encourage people like him by giving him any attention.
babyhenry
o really, because we all know that government are experts when it comes to spending money and redistributing wealth, which in many occsassion just goes in the pocket of lobbyist or the politicians themselves.
 
 
 
 
 

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