WASHINGTON, D.C.: The head of the World Bank, Jim Yong Kim, criticized companies dodging taxes on Thursday (Friday in Manila), calling it corrupt behavior that ultimately hurts the poor.
The World Bank president said that developing countries needed to build more equitable taxation that could bring in revenues that “could easily eclipse official development assistance” they receive.
“Some companies use elaborate strategies to not pay taxes in countries in which they work, a form of corruption that hurts the poor,” Kim said in a speech ahead of the World Bank and International Monetary Fund (IMF) annual meetings next week in Lima, Peru.
According to a recent United Nations report, tax evasion is costing an estimated $100 billion in lost public revenues in poor countries.
The world’s central bankers and finance ministers, at the Lima meetings next week, are expected to approve a broad action plan aimed at battling multinationals’ strategies to reduce their tax burdens and shelter profits in tax havens.
In his speech, Kim argued that economic growth alone was not enough to help pull people out of poverty.
“A focus on GDP growth is simplistic,” he said.
“We reject ‘trickle-down’ approaches that assume any undifferentiated growth permeates and fortifies the soil and everything starts to bloom even for the poor.
“We need to find an economic growth model that’s inclusive, that lifts up the poorest citizens rather than maintains those at the top.”
Anti-poverty nongovernmental organization Oxfam welcomed Kim’s speech, and in particular his rejection of trickle-down economics.
“Jim Kim rightly points out that the very wealthiest are capturing an excessive share of the proceeds from growth and too often this enriches only those at the top,” said Nicolas Mombrial, head of Oxfam’s office in Washington.
He called on Kim to support at the upcoming World Bank-IMF meetings “a process that has all countries on an equal footing so an international corporate tax system is created that works in the interest of the majority—not the vested interests of the few.”
The 188-nation World Bank, the leading development lender, has set targets of eradicating extreme poverty by 2030 and boosting the shared prosperity for the bottom 40 percent of the population in developing countries. |