‘In the UK, we’ve seen real-term cuts in benefits for some of the poorest people, while we know that there’s a significant amount of corporate tax unpaid,’ he said.
‘But actually when you’re looking at countries with much lower income levels, the impact of lost revenues is much more direct – not just on the quality of development but on people’s lives, and whether people are alive at all. Impacts on things like mortality and health are dramatic.’
For organisations like Save The Children, it’s not just an economic but a political problem.
‘Paying tax is part of a relationship with the government and it gives the right to hold governments to account,’ said Mr Cobham.
‘Unfortunately, when you have major taxpayers obviously not contributing in the same way, it undermines the trust all the way through the system.’
He believes where that trust is damaged, developing countries are left with far less representative and accountable governments, which have fewer resources but are also less likely to spend them for the benefit of their citizens.
Nevertheless, aid agencies have been encouraged by the UK government’s recent announcement that tax transparency will be a priority at next year’s G8 summit.
In the wake of the attention given to Starbucks’ financial affairs, campaigners hope to keep the human cost of tax avoidance at the forefront of political discussions.
‘We’re obviously pressuring them, as NGOs, to make sure that developing countries are included in anything they agree,’ said Mr Cobham.
‘In particular, that would involve requiring companies like Starbucks to be much more transparent in each country where they operate, in order for tax authorities to see if there are obvious problems.’
Read more: http://metro.co.uk/2012/12/17/starbucks-amazon-and-google-tax-avoidance-what-is-the-impact-on-developing-countries-3317029/#ixzz3uWv43ftu