With many of their governments strapped for cash, leaders at a summit of rich nations vowed Tuesday to crack down on tax cheats by swapping financial information and exposing companies that set up elaborate structures to hide their profits.
The agreement was one of the clearest indications yet of growing momentum behind a global crackdown on tax evasion and avoidance following criticism that corporations such as Apple and Google, as well as wealthy individuals, have exploited loopholes or gone to great legal lengths to escape paying their fair share.
The Group of 8 nations – including the United States, Japan and Germany – pledged to promote an international system of automatic information-sharing between tax authorities, and to take steps toward forcing shell companies to reveal who their true owners are. Such moves are considered crucial to eliminating schemes that activists say result in the worldwide loss of billions, perhaps trillions, of dollars to the public purse, which could be spent on schools, hospitals and poverty-reduction.
While details of the measures have yet to be worked out – and are likely to encounter strong resistance from multinational corporations – officials hailed the 10-point agreement as real progress on an issue that countries have promised, but failed, to tackle before.
“These are really strong commitments that have never been written down in this sort of way and then signed. And I made sure that every G-8 leader signed them,” said British Prime Minister David Cameron, who hosted the summit in Northern Ireland. “This is now, yes, words on a page, but words on a page that the G-8 is going to be judged on year after year after year.”