Editorial: A taxing subject for the G8 leaders

David Cameron wants a low-key G8; no spouses, no rock stars, possibly no show-stopping announcements. Given that the eight leaders assembling in Northern Ireland are not likely to agree on Syria, and a growing tendency to dismiss the G8 as irrelevant, it sounds like prudence on the Prime Minister’s part.

G8 summits certainly are less significant than they were, but that doesn’t mean they have no use. On the contrary, if Mr Cameron can persuade his guests to sign up to an international agreement on tax avoidance and evasion, it will be a remarkable achievement.

He has already persuaded Britain’s overseas territories and dependencies (the Cayman Islands, Bermuda, Jersey…) to back an international convention on tax, a drive to get countries to share information on tax and the true ownership of companies. The goal is greater transparency and stopping international corporations from moving profits from one country to another where the tax rates are lower or non-existent. Now Mr Cameron wants “the whole world to move towards public registers of beneficial ownership”, starting with our G8 partners.

The significance of a clampdown on corporate tax evasion is enormous and is worth trillions. It is not merely about compelling companies such as Google, Starbucks and Amazon to stop “aggressive tax planning”.

Mr Cameron’s adviser on the subject, Professor Paul Collier, says that if all the resource-hungry companies operating in Africa paid “reasonable” taxes, most of these countries would no longer need foreign aid.

The question is whether the proposals have teeth and whether the G8 leaders want to do more than sound tough. There are doubts whether the proposed register of company interests in the UK will be made public. Without resources, the convention will not be enforced, either. Possibly, little will happen in the short term, but at least the scandal of the world’s richest companies paying the least tax is coming under the spotlight. That is an advance.