09/12/2016 World Business Report

A cash pile twice the size of the US economy - hidden offshore.

So what can be done to tackle the tax dodgers?

Kenya's about to become the world's newest oil exporting nation.

Good morning, Britain. Hello, world. Welcome to the programme. If you are

hovering in front of the TV, stay where you are. It is only eight

minutes, and exciting. It is a bite-size snapshot of what is going

on in the world of business. We are talking tax -

and why many big businesses and wealthy people seem

to pay so little of it. Today politicians from all

round the world are in London for a Global Tax

Transparency Summit. They'll be discussing how

to promote tax transparency According to the Tax

Justice Network, as much as $36 trillion

is now hidden offshore. That's twice the GDP

of the world's biggest In other words, double the value

of all the goods and services It's not just about tax evasion -

but also legal tax avoidance. companies have stashed $2.1 trillion

in profits overseas as part of a perfectly legal operation

to avoid paying high US taxes. They are under growing

pressure over this, though. I'm sure you heard

about this yesterday. McDonald's said it's

moving its non-US tax base from Luxembourg to the UK due

to the "significant number of staff" The Luxembourg tax affairs

of the fast food giant are under formal investigation

by the European Commission. It says McDonald's has paid no

corporate tax in the city state despite booking profits worth

hundreds of millions Our business editor Simon Jack says

there is a growing focus by the EU on cosy tax arrangements

in countries like Luxembourg. The tax authorities have been

turning up the heat on multinationals killing in

Luxembourg, the so-called sweetheart deals where they funnel money from

elsewhere. Why go to the UK? They do have significant operations there,

but we have very low corporation tax as well at 20%. It is due to go down

to 70% by the end of Parliament. There will be half the tax rate you

find in France. -- 17%. Paul Monaghan is founding director

of the Fair Tax Mark - a scheme that certifies businesses

that are fair and transparent We will talk about that more in a

moment. Thank you for coming in at this horrid hour. I did not know

that amount, 36 trillion dollars. It is staggering. To put that in

context, is towards the aid budget the West gives the developing world.

We are looking for where does the pot of money come from to challenge

climate change. These are the sums of money you would need to do these

things. Exactly, put it to good use. Let's use the most recent example

with McDonald's saying yesterday it is coming to the UK from Luxembourg.

Luxembourg is copping a lot of pressure. Is the tide turning? Is

public opinion working? They are angry at these corporations. The EU

is changing its attitude. Legislators are now catching up with

public sentiment, they wanted to stop. When you have multinational

corporations paying less in corporation tax that we pay in

individual tax, people rightly get angry. It is the number-1 concern

when it comes to conduct. John Kennedy talked about this in 1961,

about the emergence of it. The EU is now calling Apple to account and

others to account. The UK is starting to do stuff which is why we

have this conference today with 33 countries and legislators from

around the world. The trick is going to be how we not just close the

loopholes they get the corporate state to pay tax to stand up and

say, we want this to create a level playing field. The crackdown is on

these corporations that pay very little, very little tax. They don't

even pay the 20% corporate tax. But is there a danger we are starting to

see an era of corporate tax just becoming lower and lower? You said

there is a danger of corporate tax being lower than regular tax? There

are two issues in parallel. Corporation tax is to be about 50%

and it is now about 25%. It is coming down, and people are

comfortable. But we get the staggering examples of tax

avoidance. When multinationals are paying 2% or 3%, that is when people

are saying lower it, but pay for it. This system you run, it is almost

like the fair trade we see on products, like coffee. Businesses

pay the tax and a transparent about tax. Not everybody is at it. A lot

of businesses to pay the tax willingly. What they want to say is

we paid the tax, it is the right thing to do, let's all do it. Great

stuff. We appreciate it. Are you going to the summit? Yes. Good.

Report back. There you are. I was looking over a new did not click in

time! -- and you. Now, when you think of Kenya,

you think coffee, agriculture - but I tell you -

you don't think oil, right? But you may have to get used to it

because Kenya is poised to become the newest oil exporting

nation next year. Since oil was discovered

in the East African nation four Now oil producers have agreed

to cut their output to tackle a global glut of the stuff -

and support prices. But it's bad timing for Kenya -

so can it make the sums add up? The BBC's Nancy Kacungira reports

from Northern Kenya. Sun, wind and soil. Here, all three

are unforgiving. But beneath the dry land lies the precious resource that

has put this remote region on the map. One of the poorest parts of

Kenya, this has raised expectations. That is from a BBC report in 2014,

two years after oil was first discovered. Residents here I hope

the discovery would bring new hope to the community. I want to find out

what has changed. TRANSLATION: They have started

roadworks, but the only road being constructive is the one that go

straight to the oil. This road to the oilfields is still under

construction. It takes twice as long as it should to get to an oil well

just outside one of the main settlements. Activities here was

slowed down by the slump in global oil prices over the last few years.

Now they are picking up again. At what stage of development are you

act now? We are at the final stage, which will consist of drilling more

Wales like this one. Constructing facilities to process the oil, and

then exporting it to international markets! Oil Wales. Experts say a

pipeline is the best way to export it but Kenya will not have one until

2021. The government interim plan involves using trucks and trains to

move oil to the coast free shipping. The pilot project to export oil from

here by road is going to be an expensive one. It will cost the

government $63 million, and at current oil prices, the only revenue

double coming is about $34 million, which means the government makes a

loss of $29 million. Critics of the early export scheme say it is a

waste of taxpayers' money. If the economics don't make sense there

must be a political reason. We feel it is more political than economic.

But the government insists the pilot project is not supposed to make

money, but provide crucial information for future development.

It is about finding out what the reservoir looks like, and the only

way you can find out what the reservoir looks like is by putting

oil out of the reservoir somewhere. Making the journey to becoming an

oil-producing country, Kenya will want to avoid the mistakes that

could turn a blessing into a curse that since the hopes of this region

and the nation. -- dims. Interesting. Let me leave you with

this. Australia has given approval

for the sale of the country's largest private landholding,

the Kidman estate. It's being bought by Australia's

richest woman, Gina Rinehart, and her business partner,

Chinese developer Shanghai CRED. The estate makes up about 1.3%

of all Australian land and is about the size

of South Korea. The sale has been halted several

times due to concerns A lot of concerns about is this land

just being used to feed China, for example? Another day another record

on Wall Street. Do we have four straight up? At is the Asian

markets. Can we click over? There you go. Take a look at that. Up a

third of a percent. I will be back to take a look at the newspapers

from around the world with James. Some of the top public schools

in England are to offer up to 10,000