:00:00. > :00:22.A cash pile twice the size of the US economy - hidden offshore.
:00:23. > :00:25.So what can be done to tackle the tax dodgers?
:00:26. > :00:29.Kenya's about to become the world's newest oil exporting nation.
:00:30. > :00:50.Good morning, Britain. Hello, world. Welcome to the programme. If you are
:00:51. > :00:56.hovering in front of the TV, stay where you are. It is only eight
:00:57. > :00:57.minutes, and exciting. It is a bite-size snapshot of what is going
:00:58. > :00:59.on in the world of business. We are talking tax -
:01:00. > :01:02.and why many big businesses and wealthy people seem
:01:03. > :01:04.to pay so little of it. Today politicians from all
:01:05. > :01:07.round the world are in London for a Global Tax
:01:08. > :01:09.Transparency Summit. They'll be discussing how
:01:10. > :01:11.to promote tax transparency According to the Tax
:01:12. > :01:18.Justice Network, as much as $36 trillion
:01:19. > :01:22.is now hidden offshore. That's twice the GDP
:01:23. > :01:25.of the world's biggest In other words, double the value
:01:26. > :01:34.of all the goods and services It's not just about tax evasion -
:01:35. > :01:45.but also legal tax avoidance. companies have stashed $2.1 trillion
:01:46. > :01:49.in profits overseas as part of a perfectly legal operation
:01:50. > :01:58.to avoid paying high US taxes. They are under growing
:01:59. > :02:01.pressure over this, though. I'm sure you heard
:02:02. > :02:07.about this yesterday. McDonald's said it's
:02:08. > :02:10.moving its non-US tax base from Luxembourg to the UK due
:02:11. > :02:13.to the "significant number of staff" The Luxembourg tax affairs
:02:14. > :02:22.of the fast food giant are under formal investigation
:02:23. > :02:25.by the European Commission. It says McDonald's has paid no
:02:26. > :02:28.corporate tax in the city state despite booking profits worth
:02:29. > :02:30.hundreds of millions Our business editor Simon Jack says
:02:31. > :02:35.there is a growing focus by the EU on cosy tax arrangements
:02:36. > :02:51.in countries like Luxembourg. The tax authorities have been
:02:52. > :02:54.turning up the heat on multinationals killing in
:02:55. > :03:01.Luxembourg, the so-called sweetheart deals where they funnel money from
:03:02. > :03:07.elsewhere. Why go to the UK? They do have significant operations there,
:03:08. > :03:12.but we have very low corporation tax as well at 20%. It is due to go down
:03:13. > :03:14.to 70% by the end of Parliament. There will be half the tax rate you
:03:15. > :03:18.find in France. -- 17%. Paul Monaghan is founding director
:03:19. > :03:21.of the Fair Tax Mark - a scheme that certifies businesses
:03:22. > :03:32.that are fair and transparent We will talk about that more in a
:03:33. > :03:38.moment. Thank you for coming in at this horrid hour. I did not know
:03:39. > :03:44.that amount, 36 trillion dollars. It is staggering. To put that in
:03:45. > :03:49.context, is towards the aid budget the West gives the developing world.
:03:50. > :03:53.We are looking for where does the pot of money come from to challenge
:03:54. > :03:58.climate change. These are the sums of money you would need to do these
:03:59. > :04:01.things. Exactly, put it to good use. Let's use the most recent example
:04:02. > :04:06.with McDonald's saying yesterday it is coming to the UK from Luxembourg.
:04:07. > :04:12.Luxembourg is copping a lot of pressure. Is the tide turning? Is
:04:13. > :04:17.public opinion working? They are angry at these corporations. The EU
:04:18. > :04:21.is changing its attitude. Legislators are now catching up with
:04:22. > :04:25.public sentiment, they wanted to stop. When you have multinational
:04:26. > :04:29.corporations paying less in corporation tax that we pay in
:04:30. > :04:35.individual tax, people rightly get angry. It is the number-1 concern
:04:36. > :04:41.when it comes to conduct. John Kennedy talked about this in 1961,
:04:42. > :04:45.about the emergence of it. The EU is now calling Apple to account and
:04:46. > :04:49.others to account. The UK is starting to do stuff which is why we
:04:50. > :04:53.have this conference today with 33 countries and legislators from
:04:54. > :04:57.around the world. The trick is going to be how we not just close the
:04:58. > :05:02.loopholes they get the corporate state to pay tax to stand up and
:05:03. > :05:06.say, we want this to create a level playing field. The crackdown is on
:05:07. > :05:11.these corporations that pay very little, very little tax. They don't
:05:12. > :05:17.even pay the 20% corporate tax. But is there a danger we are starting to
:05:18. > :05:21.see an era of corporate tax just becoming lower and lower? You said
:05:22. > :05:25.there is a danger of corporate tax being lower than regular tax? There
:05:26. > :05:32.are two issues in parallel. Corporation tax is to be about 50%
:05:33. > :05:35.and it is now about 25%. It is coming down, and people are
:05:36. > :05:41.comfortable. But we get the staggering examples of tax
:05:42. > :05:48.avoidance. When multinationals are paying 2% or 3%, that is when people
:05:49. > :05:52.are saying lower it, but pay for it. This system you run, it is almost
:05:53. > :05:59.like the fair trade we see on products, like coffee. Businesses
:06:00. > :06:06.pay the tax and a transparent about tax. Not everybody is at it. A lot
:06:07. > :06:10.of businesses to pay the tax willingly. What they want to say is
:06:11. > :06:14.we paid the tax, it is the right thing to do, let's all do it. Great
:06:15. > :06:22.stuff. We appreciate it. Are you going to the summit? Yes. Good.
:06:23. > :06:24.Report back. There you are. I was looking over a new did not click in
:06:25. > :06:27.time! -- and you. Now, when you think of Kenya,
:06:28. > :06:30.you think coffee, agriculture - but I tell you -
:06:31. > :06:33.you don't think oil, right? But you may have to get used to it
:06:34. > :06:37.because Kenya is poised to become the newest oil exporting
:06:38. > :06:39.nation next year. Since oil was discovered
:06:40. > :06:42.in the East African nation four Now oil producers have agreed
:06:43. > :06:47.to cut their output to tackle a global glut of the stuff -
:06:48. > :06:54.and support prices. But it's bad timing for Kenya -
:06:55. > :06:59.so can it make the sums add up? The BBC's Nancy Kacungira reports
:07:00. > :07:13.from Northern Kenya. Sun, wind and soil. Here, all three
:07:14. > :07:16.are unforgiving. But beneath the dry land lies the precious resource that
:07:17. > :07:25.has put this remote region on the map. One of the poorest parts of
:07:26. > :07:31.Kenya, this has raised expectations. That is from a BBC report in 2014,
:07:32. > :07:34.two years after oil was first discovered. Residents here I hope
:07:35. > :07:36.the discovery would bring new hope to the community. I want to find out
:07:37. > :07:47.what has changed. TRANSLATION: They have started
:07:48. > :07:51.roadworks, but the only road being constructive is the one that go
:07:52. > :07:55.straight to the oil. This road to the oilfields is still under
:07:56. > :07:59.construction. It takes twice as long as it should to get to an oil well
:08:00. > :08:04.just outside one of the main settlements. Activities here was
:08:05. > :08:09.slowed down by the slump in global oil prices over the last few years.
:08:10. > :08:13.Now they are picking up again. At what stage of development are you
:08:14. > :08:18.act now? We are at the final stage, which will consist of drilling more
:08:19. > :08:22.Wales like this one. Constructing facilities to process the oil, and
:08:23. > :08:32.then exporting it to international markets! Oil Wales. Experts say a
:08:33. > :08:36.pipeline is the best way to export it but Kenya will not have one until
:08:37. > :08:40.2021. The government interim plan involves using trucks and trains to
:08:41. > :08:44.move oil to the coast free shipping. The pilot project to export oil from
:08:45. > :08:49.here by road is going to be an expensive one. It will cost the
:08:50. > :08:54.government $63 million, and at current oil prices, the only revenue
:08:55. > :09:01.double coming is about $34 million, which means the government makes a
:09:02. > :09:06.loss of $29 million. Critics of the early export scheme say it is a
:09:07. > :09:09.waste of taxpayers' money. If the economics don't make sense there
:09:10. > :09:13.must be a political reason. We feel it is more political than economic.
:09:14. > :09:17.But the government insists the pilot project is not supposed to make
:09:18. > :09:21.money, but provide crucial information for future development.
:09:22. > :09:25.It is about finding out what the reservoir looks like, and the only
:09:26. > :09:31.way you can find out what the reservoir looks like is by putting
:09:32. > :09:35.oil out of the reservoir somewhere. Making the journey to becoming an
:09:36. > :09:39.oil-producing country, Kenya will want to avoid the mistakes that
:09:40. > :09:52.could turn a blessing into a curse that since the hopes of this region
:09:53. > :09:54.and the nation. -- dims. Interesting. Let me leave you with
:09:55. > :09:54.this. Australia has given approval
:09:55. > :09:57.for the sale of the country's largest private landholding,
:09:58. > :09:59.the Kidman estate. It's being bought by Australia's
:10:00. > :10:01.richest woman, Gina Rinehart, and her business partner,
:10:02. > :10:03.Chinese developer Shanghai CRED. The estate makes up about 1.3%
:10:04. > :10:06.of all Australian land and is about the size
:10:07. > :10:12.of South Korea. The sale has been halted several
:10:13. > :10:27.times due to concerns A lot of concerns about is this land
:10:28. > :10:33.just being used to feed China, for example? Another day another record
:10:34. > :10:38.on Wall Street. Do we have four straight up? At is the Asian
:10:39. > :10:48.markets. Can we click over? There you go. Take a look at that. Up a
:10:49. > :10:50.third of a percent. I will be back to take a look at the newspapers
:10:51. > :10:57.from around the world with James. Some of the top public schools
:10:58. > :11:02.in England are to offer up to 10,000