G8 Agrees 'Lough Erne Declaration' on Tax Evasion Crackdown [VIDEO]

World leaders at the G8 summit in Northern Ireland have drawn up an agreement on tackling tax evasion - although it falls short of a universal deal on detailed action.

"Private enterprise drives growth, reduces poverty, and creates jobs and prosperity for people around the world," said the summit delegates in the Lough Erne Declaration.

"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."

The document specifies:

1. Tax authorities across the world should automatically share information to fight the scourge of tax evasion.

2. Countries should change rules that let companies shift their profits across borders to avoid taxes, and multinationals should report to tax authorities what tax they pay where.

3. Companies should know who really owns them and tax collectors and law enforcers should be able to obtain this information easily.

4. Developing countries should have the information and capacity to collect the taxes owed them - and other countries have a duty to help them.

5. Extractive companies should report payments to all governments - and governments should publish income from such companies.

6. Minerals should be sourced legitimately, not plundered from conflict zones.

7. Land transactions should be transparent, respecting the property rights of local communities.

8. Governments should roll back protectionism and agree new trade deals that boost jobs and growth worldwide.

9. Governments should cut wasteful bureaucracy at borders and make it easier and quicker to move goods between developing countries.

10. 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.

Leaders had already agreed to a series of vague "core principles" on how companies are misused for tax avoidance and evasion purposes, often disguising the true owners of a business to reduce their burdens.

The G8 would not commit to a unified approach on increasing the transparency of company ownership across their countries, claiming "a one-size-fits all approach may not be the most effective".

Included in the core principles was making ownership information clearer and forcing firms to put some of it in the public domain.

It is not clear how bound each G8 country is to the declaration or company ownership principles, though the UK has signalled its commitment by issuing an action plan.

Part of the plan is to amend the Companies Act 2006 so firms are made to keep up to date and accurate details of their beneficiaries. The government will also consult on how much of this information should be opened up to the public.

"This summit was a distraction which was never going to address the root cause of British public disquiet over tax avoidance: our hideously complex tax code," said Matthew Sinclair, chief executive of the TaxPayers' Alliance campagin group.

"The way to ensure that all companies and individuals pay their fair share of tax here in the UK is for the politicians at Westminster who created our tax system to simplify it by scrapping the loopholes they introduced and ensuring that tax rates are competitive. Only then will people again trust that everyone is paying what is due.

"Transparency is important, on the part of both tax authorities and multinational companies. But it is also vital that there is tax competition between different nations, because that pushes down overall tax rates for families and businesses alike."

Others were also disappointed by the G8 summit's lack of action on tax.

"For all Cameron and Osborne's tough talk on tax over the last year in the UK, there has been no tough action on tax. In fact it's seemed more like the government is trying to turn the UK into a tax haven than close them down," said Samantha Taggart of anti-austerity protest group UK Uncut.

"So it's hard to believe that today's agreement will really live up to its huge hype because it is lacking in any substance as to how it will be implemented or when by. Style over substance rarely leads to meaningful change.

"If Cameron put half as much effort into tackling tax dodging as he has into cutting our public services, it would be a thing of the past. In the UK, the government must clamp down on tax avoidance and end the political choice to slash the Welfare State, privatise the NHS and cut legal aid.

"This is why we will vow to continue to resist the government's cuts and hold the government to account with creative civil disobedience."

Tax affairs have dominated headlines in the UK as public austerity bites down on services and the economy. The spotlight has been put on multi-national firms such as Google and Amazon who pay little into the Treasury.

The corporate giants say they comply with the laws they are told to operate to, as well as create thousands of jobs, though there has been public outcry at the relative pittance paid in tax by some big businesses.

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