Johannesburg - Oxfam has called on the world's governments to institute a plan of action aimed at curbing large corporations from what it described as "cheating" impoverished countries out of over $170 billion in tax revenues every year.
The comments by the Confederation of charity organisations comes in the wake of the Paradise Papers scandal which has exposed how some of the world's wealthiest companies, government leaders as well as public figures in the entertainment, politics and sports sector who have secretly used offshore accounts to hide their money and dodge tax systems.
Several South Africa companies have also been implicated in the scandal which said to be the biggest since the Panama paper leaks.
On Wednesday, Oxfam launched its briefing paper titled, ‘Stopping the Scandals,’ which assesses why international tax reforms have failed.
The paper also offers solutions to the Paradise Papers leak, which exposes tax dodging on an industrial scale. It also comes with the latest study by French economist Gabriel Zucman.
Zucman estimates that multinational companies artificially shift almost half of their total profits – 45 percent – to tax havens.
Oxfam said tax dodging was fuelling an inequality crisis where eight men now own the same wealth as half the world.
"When corporations and the super-rich dodge taxes, it is ordinary people, and especially the poorest, who pay the price as governments balance the budget by raising their taxes and cutting vital public services. Poor countries are particularly hard hit by corporate tax dodging as they are twice as dependent on corporate tax revenues as rich countries," it said in a statement.
The organisation maintained that of the $170 billion poor countries lose in tax revenues every year, $100 billion was through corporate tax dodging adding this money could provide an education for 124 million children and pay for healthcare services that could prevent the deaths of at least six million children annually.
Susana Ruiz, Oxfam’s tax advisor, said: “The Panama Papers galvanised politicians to act, but the Paradise Papers show they have much more to do. The super-rich and corporations, such as Apple and Nike, aided and abetted by tax havens and offshore companies like Appleby, will always be one step ahead of the game unless governments make fundamental changes to the tax system."
She further added: "Stopping the tax scandals won’t be easy but it is not impossible if the political will is there. Oxfam’s five-point plan shows how governments can stop the tax scandals if they put the interests of the public over the demands of the super-rich and big business.”
In its five-point plan to stop scandals, Oxfam calls on governments to, among other things, initiate a global blacklist of tax havens based on comprehensive objective criteria and to institute strong countermeasures which will include sanctions that will limit the influence of these businesses and individuals.
It further calls for a global tax body to be created where all countries will work together on an equal footing to agree on fundamental tax reforms that will ensure tax systems works for everyone.