Governments must live up to the potential the final communiqué from the G20 summit in Mexico offers for tackling the impact of tax dodging on developing countries, says Christian Aid.
In particular, a commitment to 'lead by example' by implementing automatic exchange of information could, if carried out, have a significant impact on businesses and individuals using tax havens to hide their activities.
Christian Aid's senior economic justice adviser Joseph Stead welcomed the G20's call for more countries to sign up to a multilateral information sharing agreement between tax jurisdictions.
'Automatic information exchange is vital if the cloak of secrecy tax havens offer those who use their services is to be lifted,' he said. 'By allowing account holders to hide their identities, tax havens effectively condone corruption.
'Activities they facilitate range from drug traffickers hiding their profits and dishonest politicians finding a safe haven for their ill-gotten gains, through to unscrupulous multinationals seeking to disguise the profits they make in poorer countries to lower their tax liability.
'We estimate that the way such businesses manipulate their balance sheet costs poorer countries as much as $160bn a year, more than one and a half the amount rich countries spend on international aid to the very countries that are being robbed in this fashion.
'We hope that G20 governments will use their political and economic power to ensure that tax havens sign up the multilateral convention as soon as possible. At present, tax havens pick and choose who they will share information with. They should not have that choice.'
Mr. Stead also welcomed a communiqué commitment that countries would seek to minimise the 'negative spillover' domestic policies they implement might have on other countries.
'We hope this will include a thorough appraisal of the way their tax policies might hurt poorer nations,' he said. 'The UN, World Bank, International Monetary Fund and Organisation for Economic Co-Operation and Development have all recommended that G20 countries take such a step.'
The US Commodity Futures Modernization Act of 2000 which deregulated trading on commodity indices in the US is seen by many as having paved the way for global food price hikes.
Non-traditional investors such as pension funds and managed investment funds entered the market and money flooded into the indices with the total value of institutional investors' holdings rising from US$15bn in 2003 to at least US$317bn in mid-2008. At no stage was the legislation's impact on world food prices taken into consideration.
'The UK is currently looking to introduce reforms to the Controlled Foreign Companies regulations which could have a significant impact on developing countries tax revenues,' said Mr. Stead.
'But the Government has neither undertaken an analysis of the potential impact, nor announced any measures to mitigate the impact. We hope that this commitment at the G20 signals a change in Government policy'.