Earlier this year the bank’s Chief Executive Antony Jenkins promised that Barclays was “changing” following a number of scandals that have damaged the bank’s image, including allegations of corporate tax avoidance using tax havens.
ActionAid’s report Time to Clean Up – How Barclays promotes the use of tax havens in Africa, shows that in September this year Barclays increased the number of tax havens it is promoting, to include the key African tax haven of Mauritius.
Toby Quantrill, Tax Justice Adviser, ActionAid said:
“Every year developing countries lose billions of dollars of vitally needed revenue because of tax avoidance by big companies using tax havens.
“When countries lose tax they lose money that could otherwise be used to build schools, hospitals and transport links, and help countries become less dependent on aid.
“ActionAid is calling on Barclays to stop promoting the use of tax havens to big businesses operating in Africa. What Barclays is doing – while perfectly legal – is morally wrong”.
Barclays promotes Mauritius as the “offshore financial centre of choice for India and the Sub-Saharan region”.
Mauritius has a very low effective corporate tax rate and its network of tax treaties with other African countries means that large companies can use it as a location to avoid tax.
ActionAid is demanding that Barclays honours its commitment to change and close its Offshore Corporate department, which it uses to promote tax havens to big businesses in Africa.
Barclays is one of the biggest banks in the world and is the largest retail bank in Africa, where it makes ten percent of its profits.
Tax avoidance and the kind of practices that are frequently used in tax havens have been strongly condemned by former UN Secretary General Kofi Annan who stated that it was “unconscionable” that companies were aggressively avoiding tax “while millions of Africans go without adequate nutrition, health and education.”
Developing countries lose between US$120 and US$160 billion a year in revenue as a result of money hidden in tax havens – more money than they receive in aid.
Pamela Chisanga, Country Director of ActionAid in Zambia said:
“Tax revenue is vital to help economies grow in developing countries like Zambia.
"But as long as major companies like Barclays promote tax havens, 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”.