Clegg in tax call amid Africa trip
Published 13/02/2013 | 05:41
Global action against tax-dodging firms is vital as the problem spreads from poor to rich countries, Nick Clegg has said as he embarked on a visit to Africa.
The Deputy Prime Minister begins a three-day tour of Mozambique and Ethiopia on Wednesday as part of the UK's presidency of the G8 group of wealthy nations.
Tightening up the international tax system is one of Prime Minister David Cameron's top priorities for progress at June's summit in Northern Ireland. Amid huge controversy over the low tax bills of multinational giants in the UK, he has warned unilateral action would simply push the problems elsewhere.
And Mr Clegg said tackling tax abuse would bolster public support for the Government's policy of increasing foreign aid while imposing austerity at home. He is using the visit to meet politicians and diplomats from across the continent as well as UK firms running successful operations in the region.
He said: "Many of the difficulties that governments face in the developing world are becoming increasingly common in the developed world.
"For too long, the developed world ignored the way in which tax revenues, which rightfully belonged to developing countries, disappeared as people exploited different tax regimes, and made a mockery of governments in the developing world. We must work together to overcome it.
"To disrupt the vicious cycle of inequity in the systems of tax and trade, we must first create a level playing field whereby responsible and thriving companies are attracted to trade and do business in a fair and transparent way.
"As the UK will meet its promise to spend 0.7% of GNI on international aid in 2013, it is vital that the benefits of aid are not wiped out by losses sustained by multinationals or individuals gaming countries' tax systems."
Mr Clegg, accompanied on the visit by International Development Minister Lynne Featherstone, is due to meet the presidents of both countries. Ms Featherstone said boosting tax revenues would help developing nations "stand on their own two feet".
Officials said trade between the UK and the two countries was "booming" - with exports to Mozambique nearly doubling last year and more than doubling to Ethiopia in 2011. Among projects funded by UK aid to be visited by the ministers are a mobile phone banking system, and a UK firm making ethanol from root vegetable cassava to replace health-damaging charcoal for cooking and fair-trade