Corporations have a duty to pay tax and shouldn't hide behind legal loopholes

Stamping out corporate tax avoidance is a moral obligation which would forego the need for international aid, the former Archibishop of Canterbury claims in a new report by Christian Aid.

Rowan Williams, who is chair of the international charity, wrote a foreword to the report in which he likens “parasitic" corporations to slave owners, saying they had no more moral right to avoid tax than people did to own slaves or employ child labour.

In the report, Tax for the Common Good, Williams said legality did not equate to morality with many corporations behaving immoraly but justifying this by saying they were acting within the law.

There is an urgent moral issue here and both governments and multinational companies must recognise their moral responsibilities - Angus Ritchie

He said: "For example, it was once legal to own a slave and to use children in the workplace, but we would not want to argue that slavery and child labour are ethically right."

Clamping down on corporate tax avoidance was crucial to cutting the need for foreign aid - with the world's poorest countries losing more in tax each year than they received in international financial support, he claimed.

Report co-author Canon Dr Angus Ritchie, director of the Centre for Theology and Community, said: "Businesses are parasitic if they make use of the resources and infrastructure of a country without contributing to it through taxation."

"There is an urgent moral issue here and both governments and multinational companies must recognise their moral responsibilities to act in ways that are for the good of the countries in which they work," he said.

Christian Aid has is just the latest of a growing chorus of international aid groups condemning corporate tax avoidance with Oxfam and Save the Children becoming more vocal on the issue as revelations about avoidance become more widepread.