#MauritiusLeaks reveal Africa is losing crucial tax revenues to tax haven of Mauritius – Oxfam reaction

Responding to research published by the International Consortium of Investigative Journalists today that multinational corporations are using the tax haven of Mauritius to avoid paying millions of dollars of tax across Africa, Jim Clarken, Oxfam Ireland’s Chief Executive, said:

“Mauritius Leaks provide yet another example of how multinational corporations are gaming the system to shrink their tax bills – and cheating some of the world’s poorest countries out of the vital tax revenues they need to get children into school or ensure people can see a doctor when they are ill.

“The true scandal is that this – like most tax avoidance schemes – is completely legal. Governments, including Ireland and the UK, must work together to shut down tax havens by ending tax secrecy so that it’s clear where corporations and the super-rich make profits and pay tax. Real political will is urgently needed to ensure meaningful transparency in the reporting of multinational companies’ tax affairs in the form of public country by country reporting. 

“This would stop companies artificially moving their profits to tax havens or using loopholes and secret deals to avoid paying their fair share. And it would let the public and governments in developing countries see what’s really going on, providing data to help review and, if necessary, reform corporate tax avoidance practices.

“It is not good enough to argue that tax avoidance is permissible because practices fall within the letter of the law. Legal loopholes abuse a broken system that allows the rich to get richer while the world’s poorest suffer.”

ENDS

CONTACT:

Oxfam experts are available for interview, including Peter Kamalingin, Oxfam’s Pan Africa Director. 

Please contact:

ROI:     Alice Dawson-Lyons: alice.dawsonlyons@oxfam.org / +353 (0) 83 198 1869

NI:        Phillip Graham: phillip.graham@oxfam.org / +44 (0) 7841 102535

Notes to the editor:

Mauritius Leaks revealed that multinational corporations artificially but legally shifted their profits out of African countries where they do business to the corporate tax haven of Mauritius, where foreign income like interest payments are taxed at the very low rate of 3 percent. Unfair tax agreements signed between Mauritius and countries in Africa and Europe allow some companies cut their tax bills even further.

Mauritius Leaks is a global investigation by the International Consortium of Investigative Journalists (ICIJ). For more details see: https://www.icij.org/investigations/mauritius-leaks/

 

Since 2014, a huge number of documents, including the Panama Papers and Paradise Papers scandals, have been leaked by ICIJ unveiling how tax evasion and avoidance have become standard business practice across the globe.

 

Countries from across the globe, including several African countries, are currently participating in a round of international tax negotiations under the OECD-G20 umbrella, including issues such as the introduction of a global minimum effective tax rate. To effectively curb profit shifting, countries must ensure the global minimum effective tax rate is set at an ambitious level and applied at a country-by-country basis without exceptions.

In 2016, Oxfam exposed Mauritius as one the world’s 15 worst corporate tax havens in its report ‘Tax Battles.’ Download a copy of the report here.

On 28 May, 2019, the Tax Justice Network launched the Corporate Tax Haven Index (CTHI). Tax Justice Network Africa cited Mauritius as “among the most corrosive corporate tax havens against African countries”.

 

Company loans from Mauritius and nine other tax havens to African countries total over $80 billion. This means that for every $6 of foreign investment in Africa, $1 was a company loan from a tax haven. Two infographics detailing this information are available for download here.