Joseph Stead of Christian Aid at the Irish Tax Institute Global Tax Conference

Joseph Stead of Christian Aid has just spoken at the Irish Tax Institute Global Tax Conference in Dublin.

Having introduced Christian Aid, and the work they do on tax, Joseph focused mainly on corporate tax, even though Christian Aid addresses wider issues.

Here are some of the key messages he gave:

There is evidence that developing countries lose a lot more money to tax avoidance and evasion that they receive in aid. Tax revenues prove the strongest correlation to development outcomes.

What do developing countries need?

• Revenue - This is where the “race to the bottom” becomes and issue.
• Simplicity in administration – Sub-Saharan Africa would need an extra 650,000 tax officials to be up to the global average.
• Equality in international taxing rights.
• Power to create the tax regime right for them. 

What do companies operating in developing countries want?

• Revenues
• Simplicity
• Equality in international taxing rights and avoiding double taxation
• Certainty and reduced tax risk.

[I think these are true much more broadly, not just in developing countries]

There is some alignment here, although both government and companies are looking for the same revenue. Whether or not we call it fairness, there is a debate about how the pie is split.

Joseph quoted a 1970 source on tax avoidance, which suggested if tax rates are sensible “like 50%”, then you should just pay them.

Rich countries are very unwilling to engage in a debate that might change the way that revenues are split with the developing world. There remains suspicion as to whether this will change.

Developing countries are changing, meaning that certainty is more difficult, by definition.

Christian Aid would like to hear from businesses as to which countries have got it right, which haven’t.

Transparency will help to bring fairness to the debate.

How do we understand development and encourage long-term investment when markets so often look at the short term?

Joseph finished by calling on those present, businesses and advisers, to share examples of where things have gone right, and also where they have gone wrong in terms of matching tax to development.

In response to a question from the floor, Joseph raised the concern that the BEPS proposals may actually come at the expense of developing countries, and financial barriers facing developing counties coming to the table.

Joseph also highlighted the Christian Aid report "Getting to Good", which can be found here.