Northern Isles MP, Alistair Carmichael, has backed a campaign calling for an end to a colonial era tax deal with Malawi.
ActionAid’s Make Tax Fair campaign is pushing for reform of the 1955 UK-Malawi tax treaty, which makes it possible for UK companies operating in Malawi to dramatically reduce their tax bill. Mr Carmichael joined fellow MPs at a parliamentary reception to back the campaign.
Commenting, Mr Carmichael said:
“Recent corporate tax scandals show how angry the British public are that big businesses are not paying their fair share. It should be no different in the tax dealings between two nations. The UK-Malawi tax treaty was written when Malawi was still a British colony and when tax law was very different from its form today.
“That’s why I’m calling on the UK government to agree a better deal with Malawi - one that ensures that UK companies pay their fair share in one of the world’s poorest countries. The UK gives significant aid to Malawi, but with the treaty in its present form, gives with one hand and takes with the other.
“Many local people in Orkney and Shetland are actively engaged in building up social, cultural and economic ties with Malawi. I am sure that they would want this change.”
David Hope Jones of the Scotland-Malawi Partnership said:
“Scotland is rightly proud of its many links with Malawi which date back more than 150 years to Dr David Livingstone. This dignified two-way people-to-people partnership unites our two nations in solidarity and friendship. Many of our 800+ member organisations across Scotland are concerned at the out-dated 1955 UK-Malawi Tax Treaty. We applaud both the UK and the Malawian Government for their commitment to update this colonial-era treaty, helping Malawi retain more tax revenue for the benefit of the people of Malawi. We look forward to seeing the outcome of the re-negotiation as soon as possible.”
Notes to editors
The Scotland Malawi Partnership is a national network which exists to coordinate, represent and support Scotland’s civic links with Malawi, and which is supporting ActionAid’s campaign. The partnership has a number of member organisations in Orkney and Shetland which have reciprocal links with Malawi. Westray Junior High School and Sanday Community School are actively connected to schools in Malawi, while Orkney Presbytery works with Malawian presbytery groups in a range of projects from feeding orphaned children to well construction.
- ActionAid has launched a new campaign calling on the UK Government to negotiate a fairer tax treaty with Malawi - https://www.actionaid.org.uk/campaign/take-action-to-make-tax-fair-everywhere
- The Scotland Malawi Partnership – an organisation which exists to coordinate, represent and support the work of organisations linked with Malawi across Scotland, and is supporting ActionAid’s campaign: http://www.scotland-malawipartnership.org/
- UK companies had investments worth US$157 million in Malawi in 2010 (the latest year for which UN data is available) - UNCTAD Bilateral FDI Statistics database, available at: http://unctad.org/en/Pages/DIAE/FDI%20Statistics/FDI-Statistics-Bilateral.aspx
- Since the campaign launched, both the UK Government and the Government of Malawi issued statements in which they say they hope a treaty can be renegotiated soon. ActionAid and the Scotland Malawi Partnership welcome this progress, and will continue campaigning to ensure that any new treaty is fair and helps Malawi raise revenue to fight poverty.
- Join ActionAid’s twitter campaign using #MakeTaxFair
- Research from the IMF estimates that developing countries may lose $200 billion a year to corporate tax avoidance. See IMF Working Paper - Base Erosion, Profit Shifting and Developing Countries. May 2015. Page 21. Figure 3.
An ActionAid / Oxfam poll shows that only 9% of UK adults think the current law does a good job of ensuring that large international companies pay the tax due around the world.