The UK Labour Party has blamed the Conservative government of keeping its eyes closed on tax havens related to Tory donors. In the light of the new Pandora Papers leak, the ruling Conservative Party is bought by wealthy people who are linked to tax havens.
In a research conducted by the Labour Party, the Conservative government is accused of ignoring public contractors who have been using countries that are tax havens. According to the Labour Party, eight out of ten government contractors are in one way or another linked to offshore havens and more than 77% of the government’s strategic suppliers who provide services to public sector organisations have connections with tax havens.
In 2019, when Boris Johnson came to office, 73% of government contractors were linked to tax havens, now showing an increase during his tenure. For many years, multinational companies have minimised payments and shifted profits to countries with lower taxes or zero tax regimes. Presently, the Labour Party is accusing the Conservative Party of not implementing a global minimum tax rate of 21%. Based on the Labour Party’s analysis, 31 strategic suppliers out of the 40 are connected to tax havens.
Tax havens are countries that operate zero-tax regimes or levy less than 10% tax on company profits. A group of 136 countries are going to set a minimum global tax rate of 15% for larger corporations. They want to set a floor for countries that attract investments with low tax rates. This group also seeks to stop big companies that gain profits in low-tax countries like Ireland and Hungary. The UK Labour Party has called on the UK government to back a minimum rate of 21% tax or more, especially at a time when it is revealed that Conservative donors are connected to tax havens. The Labour Party’s analysis comes in the wake of the publication of the Pandora Papers, revealing the use of tax havens by major Conservative donors. The Labour Party has said that Boris Johnson and his chancellor have closed their eyes on tax avoidance by large firms like Amazon.
Tax System gaps
The Opposition Party’s analysis listed a number of corporations, such as BAE Systems, which have won agreements worth £14.7 billion since Johnson took office in July 2019, that avoid taxes. In Britain, the tax payer’s obligations depend on to the location of their assets and the sources of their income in addition to their ordinary residence status. Whereas the UK tax system is restricted for ordinary people and retailers, it seems that wealthy people use offshore resources to avoid taxes.
Income Tax, among other taxes, is important to all British people. A person’s income is the money they receive from an employer or their own profits if they are self-employed. Job benefits and any incomes from a trust, rental income, and interests on savings over people’s allowances, are all included in the income tax.
In Johnson’s government, it does not matter where the Conservative donors paid their taxes or how the rich donors made their money, but the size of the donation they make to the party does matter. Johnson’s Conservative government supports the billionaires getting richer. British tycoon funders pay very little tax in the country. There are also some wealthy newspaper owners who are reluctant to pay taxes, but the secrets of these funders were kept from the public for years. The billionaires turned politics into a financial commodity, and the Conservative Party belongs to those super-rich donors. Once Johnson became the Conservative Party’s leader, he appointed Ben Elliot as Tory co-chair. Elliot jointly possessed a secret offshore film financing company that indirectly benefited from more than 120,000 pounds of UK tax credits. With such an example, there is a question of whether the UK government helped to fund projects controlled in tax haven countries.
Opposition parties have said that the revelations raise questions over donations given to the Conservative Party, and the UK government should act immediately to clear this up. Since the Pandora Papers have been revealed, Boris Johnson has escaped questions about Conservative donors who were named in the papers. The Guardian has seen documents which show the luxurious villa Johnson spends time in, rented out by environment minister Zac Goldsmith and held by an offshore structure based in a tax haven.
Following the massive exposure of financial data showing that London is a key target for some wealthy and powerful people to hide their assets, campaigners asked Britain to tighten its defences against money laundering and tax escape. The Pandora Papers revealed how senior Conservative Party figures and donors, along with some other politicians in the world, depend on offshore havens to keep their assets sheltered. After accusations against the Conservative government, Chancellor Rishi Sunak declared that offshore companies used to avoiding tax and hiding wealth from authorities is a global problem.
The Labor Party supports taxpayers
The Labour Party has accused the ruling Conservative Party of turning a blind eye to tax havens. The Pandora Papers leaked recently have revealed that wealthy individuals, including donors to the government, use financial measures to avoid tax, but most Britons live by rules and regulations that make it possible to automatically deduct taxes from their paychecks and properties. In the meantime, the UK government escapes answering questions about Conservative donors who are among those owning properties in tax havens.
Based on the revelation, London is a place for the rich and powerful to conceal their properties as many properties in England and Wales are owned by anonymous firms registered in tax havens. Since Prime Minister Boris Johnson took office in 2019, the number of government contractors connected to tax havens has increased. Now Johnson, who has been the big winner of the rotten financial system, must explain to the British public why the Conservative Party has been funded by wealthy donors who avoid taxes.