G8 Lough Erne Declaration
Taking combative steps to prevent the prolific use of tax havens was top of the agenda for David Cameron at this year’s G8 summit. Despite the summit being slightly overshadowed by debates over Syria all G8 leaders agreed to sign the Lough Erne Declaration.
The Lough Erne Declaration details criterion for the future of tax evasion. A major aspect of this is the focus on private enterprise, “which drives growth, reduces poverty, and creates jobs and prosperity for people around the world.”
There is also an acceptance of responsibility for all leaders to ensure proper regulation. Cameron was eager to push through increased transparency and the Lough Erne Declaration includes this, as well as fair taxes and open trade.
Automatically sharing tax information and obtaining owner details from shell companies – a common vehicle used to manoeuvre investments through loopholes in the law – will attempt to close down on corporate tax evasion and money laundering.
The Organisation for Economic Co-operation and Development (OECD) plan to utilise and develop an existing tax sharing system to use globally. The system was initially set up by the five largest European economies and the USA to facilitate tax sharing internationally.
In addition UK Chancellor George Osborne and the US White House revealed plans for setting up a register of companies and their owners to ensure better management of corporate taxation.
Cameron’s “The Three Ts” – tax, trade and transparency not only succeeded in signing the Lough Erne Declaration, but also in launching free trade negotiations between the EU and US. Cameron described this as “the biggest bilateral trade agreement in history”.