Tax Avoidance: Base Erosion and Profit Shifting
Debate between Baroness Penn and Lord Bishop of Winchester
Baroness Penn (Con)
The UK is committed to BEPS 2.0 being an inclusive process. Capacity building and technical assistance remain key priorities for the UK as they empower developing countries to draw on more of their own resources as key enablers of the sustainable development goals. This includes a £47 million package from the UK to support developing countries’ tax and public finance systems, including the OECD’s work on international tax standards to tackle evasion and avoidance.
The Lord Bishop of Winchester [V]
My Lords, I underline what the noble and right reverend Lord, Lord Harries, has brought into focus. The loss of corporate tax—about 3% from high-income economies compared with 9% for low-income ones—further exacerbates the impact of coronavirus on trade and tourism. For example, sub-Saharan Africa currently faces its first recession in 25 years, with up to 14 million people driven into extreme poverty. Can the Minister assure the House that Her Majesty’s Government will urgently offer the OECD technical support in the form of revenue analysis along with support for legislative and policy measures so that countries that wish to implement unilateral tax reforms will have the wherewithal and advice to do so in the best way?
Baroness Penn (Con)
My Lords, I can make that commitment. By their very nature, these proposals will benefit low-income countries by expanding their tax rights and reducing the incentive to shift profits away from such jurisdictions. As I outlined in my previous answer, the Government are also committed to putting resources behind capacity building to ensure that low-income countries can also benefit from these measures.