The following excerpt is from an article published by Reuters/AlertNet on September 24, 2009. To read the article in its entirety, please click here. To view the report on which the article is based, please click here.
As the leaders of the rich world meet in Pittsburgh this weekend to discuss the economic crisis, Christian Aid launches a report highlighting the way in which derisory tax rates deprive poor countries of billions in lost revenue.
Developing country governments have for decades charged multinational companies seeking to exploit their natural resources very low tax rates, under pressure from the World Bank and International Monetary Fund.
Undermining the Poor focuses on the tax policies of three countries in Latin America – Guatemala, Peru and Honduras.
Guatemala is a particularly stark example of a country suffering real hardship because of poor taxation policies. While the average tax take for Organisation for Economic Cooperation Development (OECD) countries was 35 per cent of GDP, in Guatemala in 2008 it was just 11.3 per cent.
‘Even as the food crisis deepens in Guatemala, much needed revenue which could be used to alleviate malnutrition is being lost through the woefully inadequate tax rates charged to companies mining precious minerals,’ said Ms Kumar.
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