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Tax Collection

Oral Answers to Questions — International Development – in the House of Commons at 11:30 am on 12th January 2011.

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Photo of Catherine McKinnell Catherine McKinnell Shadow Solicitor General 11:30 am, 12th January 2011

What steps his Department is taking to support the work of Governments in developing countries to increase the size of their tax base.

Photo of Julie Hilling Julie Hilling Labour, Bolton West

What efforts his Department has made to support good governance in the field of tax collection in developing countries.

Photo of Alan Duncan Alan Duncan The Minister of State, Department for International Development

Any country requires some level of taxation to fund the basic services that it needs. DFID advises and assists Governments in the development of fair, equitable and efficient systems of collecting tax.

Photo of Catherine McKinnell Catherine McKinnell Shadow Solicitor General

The Minister will be aware of the Dodd-Frank Act in the United States, which requires companies registered on Wall street to disclose all payments on a country-by-country basis, including tax payments. Will he meet me and representatives of the Publish What You Pay campaign, including NGOs such as CAFOD and Oxfam, to discuss how we can introduce similar legislation in the UK, thereby improving transparency and access to development?

Photo of Alan Duncan Alan Duncan The Minister of State, Department for International Development

It will always be a pleasure to meet the hon. Lady, and I am very happy to do so. The Act requires companies to disclose payments to foreign Governments. We should await the outcome of ongoing work, such as the development of rules on how the Act will operate, before deciding whether UK action is needed.

Photo of Julie Hilling Julie Hilling Labour, Bolton West

The OECD recognises that poor countries are likely to lose more money through tax dodging than they gain in aid. The coalition agreement promised to clamp down on tax avoidance, so will the Minister set out today what action his Government have taken to push for the introduction of country-by-country accounting? It will cost the Government nothing but make a huge difference to people in developing countries.

Photo of Alan Duncan Alan Duncan The Minister of State, Department for International Development

The OECD and the International Accounting Standards Board are both doing work related to that issue, and we hope that it will help to identify the best way forward. Action to tackle tax evasion through more transparency and the exchange of information, instigated by the G20 and led by the Global Forum on Transparency and Exchange of Information for Tax Purposes, has already produced good results, such as a big increase in the number of bilateral tax information exchange agreements. [ Interruption. ]