Economists call for new global rules to report firms’ taxable activities country-wise

A group of 300 prominent economists have called for new global rules to force companies to report taxable activities country by country. In a letter to world leaders, the group has called on the UK to ''take a lead'' to establish more tax transparency.

Meanwhile, the UK government has organised an anti-corruption summit on Thursday, which would likely be attended by representatives of 40 countries as also the World Bank and the IMF.

Many overseas territories, including the Cayman Islands, have shown little interest in the idea, and their attendance at the summit remains doubtful.

The letter's signatories include best-selling author Thomas Piketty and 2015 Nobel Prize winner Angus Deaton.

The group also includes Ha-Joon Chang, the highly regarded development economist at Cambridge University, Nora Lustig, professor of Latin American economics at Tulane University, as also influential experts who advise policymakers, such as Jeffrey Sachs, director of Columbia University's Earth Institute.

Speaking on BBC Radio 4's Today programme, Sachs said: ''The UK and the US need to take the lead right now to end these tax secrecy havens. We see from the Panama Papers these are simply conduits for massive illegality, corruption, tax evasion and many other nefarious deeds. They just need to end.

''If the UK and US and the European Union as a whole decided on Thursday at the UK conference that enough is enough ... there could be a phenomenal change in a very short period of time.''

"We need new global agreements on issues such as public country-by-country reporting, including for tax havens," the economists wrote in the letter.

"Governments must also put their own houses in order by ensuring that all the territories for which they are responsible make publicly available information about the real 'beneficial' owners of company and trusts," they add.

The letter comes in the wake of the Panama Papers leak, which revealed how some rich people hid assets which led to widespread condemnation of the authorities' failure to act.

One of the signatories, the economist Dr Ha-Joon Chang of the University of Cambridge, told the BBC that he signed the letter because he shared "the view that tax havens serve no useful purpose".

Dr Chang said: "These tax havens basically allow companies and certain individuals to free-ride on the rest of humanity.

"These companies and people make money in one country by using workers educated with public money, using roads, ports and other infrastructure paid for by the taxpayers of that country and moving the money to another country in a shell company which doesn't really do any business there."