Tax abuse is leaving developing countries struggling to respond to Covid-19, according to the latest report by Christian Aid.

It says tax avoidance by multinational companies and wealthy individuals has left many poorer countries without the funds needed to protect their citizens.

Speaking on Morning Ireland, Sorley McCaughey, Head of Policy and Advocacy at Christian Aid Ireland, said that $416 billion is lost by developing countries every year due to tax abuse.

"If you compare that to the $320 that we estimate is needed for universal health coverage, that puts things into perspective when we look at the spend on tackling the pandemic," he said.

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The UN estimates that countries across the world need to be spending around 10% of GDP on their Covid-19 response, but Mr McCaughey said developing countries are only spending a fraction of that.

"In Ireland we are spending around 14%, Germany is spending 40% but a country like Ethiopia is only able to spend about 1.75%, while Kenya is spending about 0.9%," he said.

"This is woefully inadequate and isn't enough for them to be able to respond to the crisis in a meaningful way and this is in part down to the tax abuse of multinational companies and ongoing debt repayments they have," he added.

Christian Aid is calling for the immediate cancellation of debt repayments for the poorest countries for the rest of this year and for 2021.

Mr McCaughey said countries should not be "wasting" money on debt repayments at this time.

"64 countries spend more on debt repayments than on healthcare. The poorest 73 countries are due to pay over $30 billion in debt repayments over the rest of the year. Cancelling their debts would prevent the diverting of much needed money to be spent on responding to the impact of Covid-19 within their own countries," he said.

The Christian Aid report recommends a number of short and medium-term tax reform measures and Mr McCaughey said the Irish Government has a "significant" role to play here.

"We are calling for the introduction of a minimum effective corporation tax rate. This is a process that has already been discussed at the OECD. We are calling on Ireland to play a more progressive role in ensuring that a sustainable, adequate and equitable rate is reached to ensure that we see a halt to the race to the bottom in corporation tax rates but also crucially that countries are able to raise the revenue they need to respond to the virus," he said.

Mr McCaughey said Christian Aid is also recommending that Ireland removes their "opposition" to public country by country reporting.

"This is a measure that would bring greater transparency to the activities of multinational companies and shine a light on instances where they might be shifting profit to lower tax jurisdictions. Making this public would disincentivise this profit shifting," he said.

Christian Aid is also calling for multinational companies to be treated as single entities for tax purposes.

"This would ensure taxable income is shared on an equitable basis between the countries where multinationals have operations," Mr McCaughey said.