British tax havens are dodging reform – but MPs are pushing back

The British Virgin Islands (BVI) – the world’s biggest corporate tax haven – is trying to dodge reforms that would shed light on tax abuse.

The BVI, which is a British Overseas Territory, had promised to open up the books by introducing more transparency over the companies operating there.

This is important because there is a long history of criminals, money launderers and tax dodgers hiding their money behind anonymous shell companies registered in the BVIs.

The BVI government has just published a proposal on how they intend to introduce more transparency.

They will bring in what are called public registers of beneficial ownership. But – and this is a big but – the BVI government will control who gets to see these registers.

They’ll get to decide who has a “legitimate interest” to access this information.

A smoke screen

Company owners would also get tipped off when requests were submitted – and get to challenge them, which means important information could be hidden or delayed.

So what the BVI government is proposing is essentially a smoke screen – it will not introduce real transparency.

Critics – including British MPs – say this new proposal would continue to allow criminals to move and hide money – and also endanger journalists and investigators putting in the requests.

The BVI – and the shadowy tax dodgers that hide their extreme wealth there – are trying to stop financial transparency dead in its tracks. Former development minister Andrew Mitchell has described it as “shameful”.

Our allies at Tax Justice Network Africa have also urged British Overseas Territories to introduce more transparency.

Tax abuse on an industrial scale

Why does this matter? The BVI has been linked to huge financial scandals.

In the 2016 Panama Papers leak, it was revealed that half of the offshore companies involved were based in the BVI.

At the time, Tax Justice Network said “the Panama Papers could just as well have been branded the ‘British Virgin Islands Papers’.”

They said that dodgy companies flocked there because of its “lax, flexible, ask-no-questions, see-no-evil company incorporation regime.”

And just last month The Guardian revealed how the islands appear to be being used by Roman Abramovich to avoid tax.

We’re pressuring the government

Your support has helped us build pressure on the Government to make the BVI and other British tax havens introduce more transparency.

Just yesterday, MPs debated British tax havens in Parliament, urging the UK Government to stick to its ambition for fully accessible registers – and to make the BVI comply.

MPs across the political spectrum made their arguments to the tax Minister James Murray.

“We cannot allow secrecy to be a barrier to tax justice”, said Labour’s Phil Brickell. “This has gone on far too long,” added former Conservative Minister Andrew Mitchell.

And Liberal Democrat MP Bobby Dean said “those who are most able to pay are also most able to avoid paying…the sense of injustice really burns people up”, while also calling for the UK to be an active participant in the UN Tax Convention.

Our allies at Tax Justice Network Africa have also urged transparency for British Territories.

It’s with your help we’ve been in the halls of power in Parliament, building relationships with many of these MPs and pushing them to make the case for tax transparency. This support is paying off.

This means we have momentum to pressure the BVI, but we need more voices – and more MPs – speaking up.