Oil and gas firms will have to report the amount of tax they pay – and have the details published – under a deal agreed by the leaders of the G8 last night.
Prime Minister David Cameron said the move by the world’s major economies aimed to ensure that “natural resources are a blessing and not a curse”.
The Conservative leader hailed the wider agreement, sealed by the G8 leaders in Northern Ireland, which he claimed could “rewrite the rules” on tax and transparency to benefit states across the world.
The Lough Erne Declaration – signed by the UK, US, Germany, France, Italy, Canada, Japan and Russia – vows to “fight the scourge of tax evasion” by ensuring the automatic exchange of tax information and changing the rules to stop multinational companies shifting profits across borders to avoid paying their fair share.
A key pledge in the 10-point document was to tackle corruption by “requiring extractive industries such as mining, oil and gas to report payments to all governments – and requiring governments to publish their income from such companies”.
Mr Cameron had made it clear when taking up the year-long rotating presidency of the G8 that he wanted the summit to produce a simple, easy-to-understand summary of positions agreed at the summit.
After reaching the deal, the prime minister said: “We agreed a Lough Erne declaration that has the potential to rewrite the rules on tax and transparency for the benefit of countries right across the world, including the poorest countries in the world.
“We have commissioned a new international mechanism that will identify where multinationalcompanies are earning their profits and paying their taxes so we can track and expose those who aren’t paying their fair share.”
The document, released after two days of talks, falls short of the demands of anti-poverty campaigners who want the developing world included in the new arrangements from the start and have called for tax information to be made available to all on public registers.
Adrian Lovett, Europe executive director at the One campaign, said: “A transparency revolution has begun. The G8 has made an important contri bution, with action on transparency in the oil, gas and mining sectors, on open data, on aid transparency and a significant step forward on tax transparency.
“But despite the leadership demonstrated by the UK and France, the G8 collectively has taken only small steps to crack down on the phantom firms that play such a role in robbing Africa of its resources.”
The declaration says only that developing countries “should have the information and capacity to collect the taxes owed them”, rather than guaranteeing them automatic access to the information.
And it states that “tax collectors and law enforcers” should have access to information about the ultimate owners of companies, leaving it to individual G8 countries to decide whether to make the information public as campaigners are demanding.
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