As a delegation of MEPs visited London today to explore the role played by The City and the UK’s overseas dependencies on tax avoidance by corporations, massive tax avoidance by corporate giant Walmart has come to light.
An investigation by the Americans for Tax Fairness has revealed Walmart has placed $76 billion worth of assets in 78 subsidiaries and branches in 15 overseas tax havens in which it has no retail stores. Until now, these subsidiaries have remained largely invisible to even the most knowledgeable experts on corporate tax avoidance.
The report finds that Luxembourg is the centre of Walmart’s web of subsidiaries in tax havens even though the company does not have a single store in the country. Earlier ‘Lux Leaks’ revelations revealed Luxembourg as the tax haven of choice for multinational corporations in recent years.
Molly Scott Cato, tax spokesperson for the Greens in the European Parliament, and part of the special TAXE committee investigating tax avoidance in the wake of the Lux Leaks scandal, said:
“The revelations on the extent of tax avoidance by Walmart further reinforces the importance of clamping down on the regulatory loopholes which allow corporations to shift profits around to avoid taxation. While Walmart dodge billions worth in taxes, governments struggle to fund the basics needed for a civilized society such as education and health care. Ironically, their low wages also increase the burden on the state by increasing reliance on welfare payments. By using tax havens, multinational corporations such as Walmart also gain a competitive advantage over small businesses.”
Today’s discussions with government and HMRC officials came a day after the EU Commission presented its second tax package. Six months on from the Lux Leaks scandal, and now with new revelations on Walmart using Luxembourg as a tax haven, Greens have expressed alarm at the lack of action from the Commission. Molly Scott Cato, who was part of today’s delegation to London, said:
“The Commission is dragging its heels over proposals for country-by-country tax reporting, which is a crucial measure for ensuring transparency of corporate taxation. The fact that the Commission intends to revive discussions on a common consolidated corporate tax base is to be welcomed. The UK is one of the countries trying its best to sap the Commission’s resolve on this and I challenge George Osborne and the UK government to live up to their rhetoric on ending tax avoidance. We should remember that tax, when used strategically, is vital in moving our society towards the sort of future we imagine for our children, a future of sustainability as well as justice. Companies such as Walmart and their tax avoidance strategies are denying us such a future.”