Hunger – The Hidden Cost of Tax Injustice


One in eight of the world's population goes to bed hungry, with disappointing progress toward the global goal of halving world hunger by 2015.

The scandal of world hunger could soon end if the revenues that developing countries lose through tax dodging were available to them to invest in agricultural development, according to a new report from a relief and development agency in Great Britain.

One in eight of the world's population goes to bed hungry, with disappointing progress toward the global goal of halving world hunger by 2015.

The United Nation's Food and Agriculture Organization recently cited $50.2 billion annually, on top of existing funding, as the cost of creating a "world free from hunger" by 2025. 

The report, "Who Pays the Price? Hunger: The Hidden Cost of Tax Injustice," from Christian Aid, the relief agency, says that amount – and more – would be raised every year if governments ended tax haven secrecy and curtailed profit-shifting and tax dodging by multinationals in poor countries.

The report is published in the run-up to next month's G8 summit in Northern Ireland with the United Kingdom holding the presidency.

Christian Aid and other agencies in the Enough Food For Everyone IF campaign want British Prime Minister David Cameron to use the summit to make tax justice a major weapon against poverty and hunger. 

The report's publication also marked the launch of Christian Aid Week, Britain's longest running door-to-door fundraising week, which this year focuses on fighting global hunger.

"Malnutrition and related causes lead to the death of 2.3 million children every year," Alex Prats, the report's author, said. "In the developing world, it is the underlying cause of the deaths of 35 percent of all children under the age of 5. 

"At the Millennium Summit in 2000, and later in 2009 at the World Summit on Food Security, political leaders agreed to halve hunger by the year 2015," Prats said. "But despite the promises made, progress has been disappointing. In Africa, the number of hungry people has actually increased by 36 percent over the period 1990-2012, from 175 (million) to 239 million people. 

"If developing countries were able to increase their tax revenues and make effective use of the financial resources available, poverty and hunger could be eradicated," Prats said. "One of the main reasons they can't is because of tax dodging." 

The report looks at the impact of tax dodging on three countries in the developing world with economies strong enough to put them in the middle-income bracket, but where malnutrition remains rife. 

A survey of more than 1,500 multinationals in the three countries – India, Ghana and El Salvador – found that those with subsidiaries, shareholders or both in tax havens paid on average 28.9 percent less tax per unit of profit than those without such links. In India, the figure rose to 30.3 percent. 

The findings follow earlier Christian Aid research suggesting that globally, tax dodging costs poor countries some $160 billion every year. They come at a time of growing global concern about multinational tax dodging in countries where they operate, including the U.K. 

Christian Aid and its partners say a new international convention on tax transparency is needed, to which G8 countries should sign up and then pressure tax havens to ratify. 

The true ownership of companies and trusts should be put in the public domain, and new accounting rules introduced that oblige multinationals to publish details of the profits made and taxes paid in every country where they operate so tax abuse can be quickly identified. 

The theme of Christian Aid Week was "Bite back at hunger." Thousands of volunteers pushed envelopes into doors asking for action, prayers and donations to help the world's poorest communities lift themselves out of poverty. 

To help launch the week, one Baptist minister, Rev. Alison Evans, joined the bishop of Gloucester and other ecumenical partners to produce several batches of cupcakes. 

Last year, Christian Aid Week raised 12.5 million pounds (about $2.26 million) with two-thirds coming from house-to-house collections. 

A version of this article appeared originally in The Baptist Times of Great Britain and is used with permission.

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Tags: Baptist Times Staff, Injustice, Poverty, Taxation


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