Investors set sights on tax dodgersFebruary 2011
A financial reporting standard to counter corporate tax avoidance has been demanded by a group of asset managers and civil society organizations.
A statement signed by organizations including Domini Social Investments, the Interfaith Center on Corporate Responsibility, Trillium Asset Management and Yale University asserts that present reporting requirements allow multinationals to hide ‘aggressive and creative’ tax strategies.
It says this impacts directly on poverty and economic development in affected states, and is thought to lose developing countries about $100billion (£63bn, €74bn) in tax revenues per year.
The signatories urge the G8 and G20 nations, the World Trade Organization and the European Union to work with governments, companies and NGOs to ‘recognize the linkage between corporate financial transparency, good corporate governance, social justice and stable markets’.
The statement, entitled The New Haven declaration on corporate financial transparency, reinforces recent calls from investors and NGOs for compulsory country-by-country financial reporting by multinationals.
The signatories, whose investment partners represent $20bn in combined assets under management, claim to ‘recognize the linkage between opacity in the global financial system and the facilitating role it plays in allowing politically exposed persons, corrupt dictators and tax evaders to move illicit money around the globe’.
The statement says: ‘We commit to monitoring corporate activity in this area and raising these concerns with corporate management as part of our investment management practices.’
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