British banking giant Barclays has come under fire for promoting the use of offshore tax havens as a route for companies investing in Africa.
The NGO ActionAid says Barclays' marketing of offshore tax jurisdictions undermines the bank's ambition of being a "force for good" and that the bank is using its Offshore Corporate department to market a range of tax havens to big businesses in Africa including promoting the low tax levels that are available.
"Every year developing countries lose billions of pounds of vitally needed revenue because of tax avoidance by big companies using tax havens," ActionAid Tax Justice Adviser Toby Quantrill said.
He added that Barclays should do more to help companies invest directly in African countries.
"When companies avoid tax, they drain billions of pounds of revenues out of developing countries that could be used to help build schools and hospitals and lift people out of poverty."
ActionAid's report - 'Time to clean up: How Barclays promotes the use of tax havens in Africa' - shows that in September Barclays Offshore Corporate increased the number of tax havens it was promoting, to include the key African tax haven of Mauritius.
Mauritius has a very low effective tax rate and its network of tax treaties with other African countries means that large companies can use it as a key location to avoid tax.
ActionAid is now demanding that Barclays honours its commitment to change and specifically to close down its Offshore Corporate department, which it uses to promote tax havens to big businesses in Africa.
"Tax revenue is vital to helping boost investment in basic services in some of the poorest parts of the world. But for as long as major companies like Barclays promote tax havens, then 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," Mr Quantrill said.
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