ActionAid challenges Barclays's use of African tax havens

The charity ActionAid is calling on Barclays Bank to cease promoting the use of offshore tax havens to large companies operating in Africa, saying this is at odds with claims by its chief executive that the bank wants to become a 'force for good'.

The charity's report, Time to Clean Up: How Barclays Bank promotes the use of tax havens in Africa claims that the bank's Offshore Corporate department has increased the number of tax havens it was promoting, to include Mauritius.

ActionAid says that Mauritius has a very low effective tax rate and its network of tax treaties with other African countries means that large companies can use it as a key location to avoid tax. The charity points to research from to the OECD which calculates that tax havens cost developing countries just under three times more than they receive in aid every year.

Earlier this year Barclays chief executive Antony Jenkins promised that Barclays was changing following a range of scandals that have damaged the bank's image, including allegations of corporate tax avoidance using tax havens.

ActionAid tax justice adviser Toby Quantrill said: 'Tax revenue is vital to helping boost investment in basic services in some of the poorest parts of the world. But for as long as major companies like Barclays promote tax havens, then there will always be businesses who avoid tax. We are asking Barclays to do better than that. We want them to show that when they say they are "changing" - they actually mean it.'

ActionAid wants Barclays to close down its Offshore Corporate department, citing a poll it commissioned which found that 57% of Barclays customers say it is unacceptable for the bank to provide services that can help large companies reduce their tax bills in developing countries. Only one in five customers supported such activity.

In a statement, Barclays Bank said: 'While we appreciate ActionAid's concern in this matter, we do not believe that their interpretation of some of the facts is correct. Barclays does not encourage businesses to set up in any particular jurisdiction and we also ensure that tax planning undertaken by Barclays, including that undertaken for clients, complies with our published Tax Principles. As such, tax planning must support genuine commercial activity and be of a type that the tax authorities would expect, amongst other requirements. This applies equally to activity in Mauritius as it does to the remainder of Barclays' operations.

Pat Sweet | Reporter, Accountancy Daily [2010-2021]

Pat Sweet was the former online reporter at Accountancy Daily and contributor to the monthly Accountancy magazine, pub...

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