All parts of the United Kingdom should follow suit, Ken Skates, the minister for economy, transport and North Wales, said Wednesday at a news conference to discuss the Welsh government's response to the pandemic. A ban on economic help for tax haven companies could be part of a new, post-pandemic economy, he said.
Welsh businesses have applied for economic assistance from the U.K. government in greater proportion than any other part of the country, Skates said. For example, 74% of Welsh businesses have applied for job retention funds made available by the U.K. government compared with 72% from businesses in Scotland, 67% of English firms and 65% of Northern Ireland businesses, he said.
But aid should be reserved for firms that do not register in overseas tax havens, Skates said.
"I think it is right that when you face a crisis and you spend so much money addressing the economic and health implications of that crisis, that businesses that don't pay tax should not benefit from the interventions that government is making," he said.
The U.K. may raise taxes and cut spending after the pandemic to address the deficit spending caused by the virus, Skates added. It should be part of an overall drive to create a more equitable economy, he said.
"This is an opportunity we must take to shape a fairer economy," Skates said. "Any spending and tax plans by the U.K. government must ensure that we narrow the gap between richest and poorest, that we develop a green economy, and develop a society that is more compassionate, that is more fair and equal."
Skates could not be reached for comment Thursday.
This week, U.K. legislators urged their government to withhold pandemic relief funds from countries dealing with tax havens.
Wales is not the only European political entity barring its domestic firms based in tax havens from receiving pandemic aid. Last week, Belgium became the fourth European Union country to block pandemic relief measures to companies with a presence in tax havens, adopting an amendment to an emergency finance bill.
France, Poland and Denmark previously adopted similar provisions to ensure that the massive amount of financial assistance being granted to companies to help them deal with the economic hardship resulting from the Europe's lockdown efforts does not end up in tax havens.
The EU list of tax havens consists of the Cayman Islands, Palau, Seychelles, Panama, American Samoa, Fiji, Guam, Samoa, Oman, Trinidad and Tobago, Vanuatu and the U.S. Virgin Islands. Registering in any of these jurisdictions, which have low or no businesses taxes, enables a company to avoid paying taxes to the country where it actually operates.
--Additional reporting by Matt Thompson. Editing by John Oudens.
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