This week multiple reports were published as numerous charities and civil society organisations cried out against the profit-shifting and tax-dodging of multinational companies. The non-profit coalition is calling for the UK government to implement a tax-dodging bill that could save developing countries over $300billion every year to put towards improved healthcare and education.
On Tuesday a new report from the Non-Governmental Organization (NGO) was published that revealed how developing countries are being deprived of the financial resources they need to tackle 
issues like poverty and fatal disease. This deprivation comes as a direct result of the profit-shifting and tax-dodging that is occurring amongst large multinational firms. The coalition is warning that these under-developed countries will continue being morbidly impoverished if something isn’t done to challenge the “outdated” and “unfair” international corporate tax system.
Around $300billion a year is being wasted by big firms
The Independent Commission for the Reform of International Corporate Taxation (Icrict) report calls for the abolition of the separate entity principle which is currently allowing big firms to manipulate their tax obligations. The principle allows companies to set up operations in a number of different countries and will view each one as its own independent entity. This means firms can shift profits to countries with low or zero taxes and move losses to countries with higher tax rates.
A recent report done by the UN Conference on Trade and Development estimated that this profit-shifting behaviour is costing developing countries $100billion a year in lost corporate income tax. In addition to this, research carried out by International Monetary Fund (IMF) researchers revealed that these underprivileged countries are missing out on as much as $213billion ever year due to tax avoidance.
The call for a new tax-dodging bill
Non-profit giant, Oxfam published its own report on Tuesday which also addresses the pressing issue of multinational tax avoidance. The document revealed that trade mispricing of G7-based companies and investors cost Africa, alone, $6bn in 2010. Oxfam was quick to point out that this figure is three times the amount of money needed to better the healthcare systems of countries like Sierra Leone, Liberia and Guinea that are battling deadly pandemics like the Ebola crisis.
Charities are now urging British government to introduce a new bill that would mean multinational companies are obliged to pay tax in all countries they choose to operate in. As the Icrict report states, “while each country is responsible for its own tax system, no country is unaffected by the tax system of others” and it’s on this premise that organisations like Oxfam and Christian Aid continue to fight.
The Icrict report stated: “We believe the only effective way to stop this abuse is to treat multinational corporations as single and unified firms and divide the taxable profits between the countries where the incomes generating activities are located. If multinational corporations were taxed as single unified firms, there would be no transfer pricing because global corporate profits would be consolidated, and thus no profits would be gained or lost through intra-company transactions.”
Toby Quantrill, principal economic justice adviser at leading charity organisation Christian Aid, added:
“Such changes will not be easy to implement and will not happen overnight. But as many people know, acknowledging the reality and severity of a problem can be the first step to recovery.”