Ivan Lewis MP, Labour’s Shadow International Development Secretary, responding to the Government’s response to the International Development Committee report on tax in developing countries said:
I am disappointed that the Tory-led Government has rejected the Select Committee’s recommendation to conduct an analysis of the financial impact of the revised Controlled Foreign Companies (CFC) rules on developing countries. On the one hand this Government claims to be committed to clamping down on tax dodging but at the same time it has introduced legislation that facilitates companies avoiding taxes in developing countries.
“With all the furore over corporate tax avoidance this week, it is disconcerting that the Government is so complacent about the impact of the rules governing Controlled Foreign Companies on the poorest countries in the world.
“Labour urged the Government to reconsider the impact of changes to CFC rules when they were being debated in Parliament, not least by tabling an amendment to the Finance Bill, but they pushed ahead despite advice to the contrary from NGOs, the IMF, the OECD and the World Bank. For all their rhetoric on tackling tax dodging the Government is failing to take the necessary action.