THE finance industry reacted coolly yesterday to claims by Christian Aid that tax regimes such as Guernsey’s cost the lives of millions of children a year in the developing world.
The charity yesterday released a report as part of its global campaign to raise awareness of atrocities in the Third World that claimed the super-rich and ‘tax havens’ are tantamount to a new slavery.
Finance bodies avoided getting involved by keeping quiet. GuernseyFinance, the Guernsey Financial Services Commission, Guernsey International Business Association and the Treasury and Resources Department all declined to comment.
But the Dean, the Very Rev. Paul Mellor, the president of Christian Aid Guernsey, said it would be questioning robustly some of the assumptions that are contained by the report.
‘We feel perhaps that it is simplistic in that it doesn’t account for the amount that the Crown Dependencies give through their Third World development funds.’
‘It doesn’t take that into account in detailed figures or the generosity of people under those tax regimes contributing to organisations like Christian Aid.’
He said he was disappointed that the blame for the UK’s ‘superrich’ avoiding tax, which would otherwise go through the Treasury and a percentage of it into overseas funds, had been placed on offshore jurisdictions such as Guernsey.
‘We believe the island’s financial industry is heavily regulated.’
He said the ‘juxtaposition’ of the German Secret Service, which recently paid an informant €4m. to reveal details of money held in Liechtenstein, with British overseas territories or Crown Dependencies was poor.
In its report, released to coincide with Christian Aid Week, the charity estimates that governments in the poorest countries are being cheated out of at least $160bn a year in tax revenues.
Christian Aid believes that up to $11trillion may be ‘stashed away in tax havens’.
The report notes the difference between tax avoidance, which is legal, and tax evasion, which is not, but Christian Aid claims avoidance is part of a ‘sliding scale of legitimacy’ used to get around the rules and shelter corporation profits.
The report states: ‘There are only four reasons for banking “offshore” – to avoid tax, to evade tax, to function in secret [and] to sidestep regulations controlling financial services or monopolistic practices. In each scenario, the pursuit of profit outweighs all other considerations, including good citizenship and social responsibility.’
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3 Article Comments
Many thanks to G.Hockey who has had the courage to expose the justified concerns of a well known charity with respects to the abuses perpetrated by offshore centres around the world. Guernsey is one of these centres sheltering under the cover of local financial ‘laws’ and infrastructures the dishonest gains of tax fraud. The obscene irony of being asked to give for charities when one knows the society one lives in is a major contributor to keeping the third world in poverty by allowing locally registered companies to hide funds stolen from governments of developing countries who need it the most.
If Guernsey, along with other Tax heavens was so clean and regulated why the ‘Banking secret’, why no transparency? Why ‘no comments’ from any of the ‘respectable’ local finance institutions? The mechanisms used to provide the necessary ‘respectability’ to hide this global plunder are numerous and complex. This article has the advantage of highlighting essential issues after the revelations from Lichtenstein, the unsolved mysteries of the ‘Investec’ operations… Each and everyone of us, from all walks of life should concern ourselves with the issues raised in Mrs Hockey’s article.
The comment of the Dean of Guernsey who said
“Christian Aid Guernsey… would be questioning robustly some of the assumptions that are contained by the report” could be taken as suppoting or being against the report.
Many have concluded that Mr Mellor is questioning the basis of the report.
The Dean is entitled to his view but the report is well researched and written and stresses the point that for every £ of tax avoided by those able to use tax vehicles etc. Someone else has to make up the tax loss.
Guernsey taxpayers are themselves experiencing the making up of tax loss as a consequence of the £100 million a year gift to the finance industry.
it is understandable that the normally verbose finance industry is being quiet about the report. The case put by Christian Aid is so compelling that it makes me wonder whether Dean Mellor is being misunderstood.
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