EEF urged Prime Minister David Cameron to take the lead on international action on tax reforms and to stand firm on his priorities to start Transatlantic Trade and Investment partnership negotiations.
According to the manufacturers’ organisation, Britain’s leadership of the G8, which starts today, must be used to drive forward an agenda that puts growth and trade at the centre of the world’s economic future.
EEF chief executive Terry Scuoler commented: “A positive outcome for this summit is critical to business therefore Britain must show leadership on trade liberalisation but tread carefully on tackling tax avoidance. Both issues require the Prime Minister to galvanise international agreement to deliver the best outcome for our economy.”
EEF added that the potential gains from a comprehensive transatlantic agreement between the US and the EU could be significant if agreement is secured on removing tariff and non-tariff barriers to trade.
Scuoler said: “A EU-US agreement on trade and investment could offer large gains on both sides of the Atlantic. It must be an ambitious agreement that includes areas that were previously off limits.”
According to Scuoler, the UK must stick with an international approach to address concerns about the tax positions of multinational companies.
The Confederation of British Industry also shared its view on the G8 tax agenda. Katja Hall, CBI chief policy director, said:
“It’s understandable that business tax has become a lightning rod in tough economic times but the oversimplification of the debate in public is counterproductive. The vast majority of businesses pay the correct amount of tax and rightly manage their tax affairs to respond to government incentives, like R&D credits, losses and one-off payments, like pensions.”
The CBI called for the creation of a global register of beneficial owners to help improve transparency of companies’ ownership to fight money-laundering and profit shifting to secrecy jurisdictions.
Hall added: “Some of the global tax rules were designed in the ‘70s and ‘80s and have lost pace with the digital business age, so we need governments to work together through the OECD to update them.”