Tax Avoidance: Base Erosion and Profit Shifting

Lord Sikka Excerpts

Monday 2nd November 2020 Lords Chamber

[Baroness Penn (Con)]

My Lords, I assure my noble friend that pillar 1 remains the UK’s number one focus, partly so that we can achieve a multilateral agreement to replace the digital services tax, which was intended to be only temporary. We also recognise that a global solution will need to include outputs on pillar 2. We are working to ensure that these proposals, including the one referred to by my noble friend, are balanced and appropriately targeted, and have the support of all those involved in the negotiations.

[Lord Sikka (Lab)]

My Lords, I draw attention to my entry in the register of interests: I am an unpaid senior adviser to the Tax Justice Network. The OECD has released aggregate country-by-country data from 26 countries including the US, China, Japan, France and India. This suggests that there is considerable international consensus around transparency. The UK has blocked the OECD from releasing its aggregate data. It would be helpful to know why. Furthermore, the analysis of the OECD’s data shows that Bermuda, a British Overseas Territory, is responsible for $10.9 billion of tax avoidance and evasion. This is particularly hitting low-income countries. Why do the UK Government continue to indulge these fiddle factories?

[Baroness Penn (Con)]

I am not aware of the particular issue that the noble Lord raises, but I will look into it and write to him. The UK is committed to progress on this initiative, which we started back in 2013 when we hosted the G20.