African leaders will warn David Cameron on Monday that his plans for a global crackdown on tax avoidance may be of little value to the world’s poorest countries.
A high-level group chaired by Thabo Mbeki, the former South African President, has found that African countries are losing $50bn a year in illicit financial flows – much of it into tax havens, and more than the annual aid they receive.
The panel will unveil its findings in Zambia on Monday as Mr Cameron urges G8 leaders to agree joint action on tax avoidance as they start a two-day summit at Lough Erne near Enniskillen in Northern Ireland. The African group will propose three measures on the G8’s agenda – a global system of tax information-sharing; identifying the real “beneficial owners” of bank accounts, often concealed behind phantom “shell companies”, and for multinationals to publicly report their business operations and tax payments in each country where they operate.
Aid agencies have praised Mr Cameron for securing a commitment by the UK’s 10 crown dependencies and overseas territories seen as tax havens, including Bermuda and Guernsey, to join a multilateral tax information sharing deal in talks on Saturday.
However, the agencies are worried that the Loch Erne meeting will fall short of the crucial demands in the African group’s report – that poor countries should be fully included in the tax and transparency deal agreed by the eight rich nations. They warn African nations will not know what information to request about firms accused of exploiting their natural resources as they often have little idea where the money ends up, and so public registers are vital.