Developing countries lose on tax revenues

Developing countries in Africa are trying to tweak their tax systems to fund social services, like schools and hospitals. But while local small businesses are being are being brought into the system, big international companies are sometimes given a tax break.

A report released this week by anti-poverty agency ActionAid found that one multinational brewer is avoiding over 23 million euros of taxes in Africa and India every year. That’s enough money to educate a quarter of a million African children.

The report says that a complex system of tax havens are used to siphon profits out of subsidiaries in developing countries, depriving those governments of significant amounts of tax.

“Raising tax revenues is absolutely essential for all developing countries,” says Chris Jordan, Tax Justice Campaigner at ActionAid. “Long term, it’s the way they’re going to get themselves out of poverty sustainably and not need aid.”

Listen to Chris Jordan’s interview with Kelsea Brennan-Wessels: