Telita Snyckers ■ In pursuit of tax justice, 2023 was a bumper year for us!
This year marked 20 years since the formal launch of the Tax Justice Network.
As part of our 20 year anniversary, we tasked On Think Tanks to conduct an evaluation of the impact we have had, the difference our research and activism have made, the policy changes we contributed to, and the broader benefit from our wins (and failures!) over the past 2 decades. The study by OTT presented an assessment of the Tax Justice Network’s 20-year history that highlighted our significant impacts in the tax justice space. The assessment highlighted how:
- The Tax Justice Network places a strong emphasis on evidence-based outputs and advocacy, which are fundamental pathways towards sustainability, professionalism, and impact.
- The Tax Justice Network has emerged as an accessible resource for media outlets, development organisations, government institutions, and grassroots movements seeking to interpret, substantiate, and assess arguments in the realm of tax justice, with the scope and reach of our media coverage having increased over the years.
- The journey towards a UN tax convention has been significantly underpinned by arguments and evidence put forth by the Tax Justice Network, providing an important part of the empirical basis to substantiate the arguments for a revolutionary governance shift.
- The Tax Justice Network has catalysed the movement through two primary channels. One avenue is diffusion, where staff or associates draw inspiration from the Tax Justice Network and establish their own tax justice initiatives or research agenda. The other involves providing support and convening global meetings primarily led by leaders from the global south and shaped by their agenda.
As in the two decades before, this work continued throughout 2023: deepening and expanding our research, analysis and advocacy, to secure narrative shifts, and bring about systemic change to challenge tax injustice.
Flagship publications and tools
Our work again reflected the impact that weak global tax policies are having, with countries being on course to lose US$4.8 trillion in tax to tax havens over the next 10 years. $311 billion of tax lost annually is lost to cross-border corporate tax abuse by multinational corporations and $169 billion is lost to offshore tax abuse by wealthy individuals. Lower income countries, which have historically had little to no say on global tax rules, continue to be hit harder by global tax abuse, with their tax losses of $47 billion being equivalent to half of their public health budgets.
Alongside work on our State of Tax Justice report, we also announced changes we’re working on in respect to the way we publish our Financial Secrecy Index and Corporate Tax Haven Index. The changes involve switching to sequential, rolling updates of partial sets of indicators, instead of large-scale updates of each of the indexes as a whole. This is intended to make the indexes more robust and impactful (while at the same time allowing for a more balanced spread of our workload.)
Our Data Portal provides a convenient way for researchers, journalists, activists and the wider public to explore, download and use data produced by the Tax Justice Network and selected data from other sources. With the data portal, we aim to provide a one-stop-shop for anyone interested in working with indicators of tax havens and financial secrecy.
The second new tool we launched in 2023 is the Tax Justice Policy Tracker, which monitors and promotes progress on nine key policies that are important for reprogramming our tax systems for the better. The tracker grades each country’s laws on how well the country is implementing each of the nine policies, helping governments spot where they can improve. The tracker also reports each country’s public position on each of the policies. We kicked off the beta version of the tracker with one live-tracked policy, the UN tax convention, because this is the most critical question facing policymakers internationally today. The next policies will be incorporated gradually in the coming years.
Over the course of 2023 we finalised a study that estimated the potential impact of a wealth tax in EU countries; closely followed and analysed the EU’s BEFIT proposal for corporate tax reform; assessed the impact of offshore leaks on bank deposits in tax havens; analysed country by country reporting data on profit shifting in Slovakia; worked on developing a conceptual framework for indicators of tax havens and secrecy jurisdictions and quantifying corporate profit misalignment at the company level; finalised a study on VAT fraud in collaboration with ECORYS; and worked on a research paper that develops a methodology to illicit financial flows using a bilateral gravity model. We also collaborated with government authorities around the world (eg Uganda, Nigeria, Slovakia, Ghana, and others) to analyse detailed administrative data and to provide granular policy recommendations for mitigating illicit financial flows.
We have long advocated for the transparency of beneficial ownership information. Over the course of 2023 we conducted a review of the state of play of beneficial ownership in Latin America and Africa. We also provided extensive input into the Financial Action Task Force’s Recommendation 25 on beneficial ownership transparency for legal arrangements; looked at 30 uses for beneficial ownership beyond money laundering; and discussed the 10 targets every country’s beneficial ownership strategy should meet. Not surprisingly, our analysis also showed how the split among EU countries in respect of beneficial ownership mirrored their rankings on the Financial Secrecy Index. Our advocacy efforts were wrapped up with various workshops, training sessions and webinars on beneficial ownership.
Importantly, 2023 also saw the launching of our roadmap to beneficial ownership transparency (REBOT), offering a graduated framework with a series of steps governments can take on the road to achieving transparency.
We have also been actively participating in various fora around the world, from the IMF and World Bank spring meetings; testifying at parliamentary subcommittees; and moderating panels at conferences – all around securing greater transparency in global financial systems.
Country by country reporting
This year saw our first country by country reporting webinar, focusing on the legislative process to explain the nature and politics of public country by country reporting by multinational companies in Europe, the United States, the United Kingdom and Australia. Policy changes secured by partners active in each location will begin to yield fruit in new public reporting requirements that kick in during 2024, as the shift to full transparency appears increasingly inevitable – while remaining a major struggle against the defenders of tax opacity.
During 2023, we explored how criminalisation of the EU directive would strengthen the fight against money laundering; commented on the EU’s DEBRA proposal; lauded the IMF for improving the way in which it engages around its money laundering strategy; explored how the SWIFT system could be the next frontier in fighting dirty money; and looked at the link between organised crime and financial secrecy.
This past year has seen us really upping the ante in terms of the link between climate justice and tax justice. In 2023 we launched the Tax Justice Network’s climate initiative with a position paper on delivering climate justice, using the principles of tax justice. Throughout the year we explored who owns the climate crisis; the climate crisis in resource-rich Africa; and “cap and share” as a progressive alternative for taxing fossil fuels. We also held an online climate justice event, unpacking how there is no climate justice without economic justice.
Tying climate justice to our advocacy work on beneficial ownership, we also explored the link between beneficial ownership and climate crimes in the fishing industry in particular; and lifted the lid on who benefits from opacity in beneficial ownership in the fossil fuel industry.
This work on climate justice is rolling over into 2024, with our March 2024 Paris conference that will be focusing on historic global emissions and centile-level climate reparations.
Enforcement by well-resourced and independent tax authorities
Our illicit financial flows analysis has been finding application on a practical level with work being done to help various government authorities to analyse microeconomic data (at the entity- or transaction-level) to identify illicit financial flows and to effectively design mitigatory policies. In 2023 this included identifying illicit financial flows using customs data; and analysing micro-level data on intra-group transactions of multinationals to identify companies to audit and to estimate the scale of profit shifting.
One of our primary objectives has been in articulating the impact that tax injustice has on the ability to secure and fund fundamental human rights. We continued to work on research collaborations with the Government Revenue and Development Estimation tool (GRADE) at St. Andrews University, exploring and illustrating the pervasive impact of tax abuse on rights to health, education and on climate justice.
Over the course of the year our human rights advocacy work also included making a number of submissions to UN special rapporteurs: on the importance of freedom of expression in sustainable development; the effects of foreign debt and human rights in Liechtenstein and the Bahamas; and fiscal legitimacy through human rights. As part of the Tax Ed Alliance – a network of global organisations advocating for transforming financing of public education – we are contributing to the development of a taskforce on tax justice and the right to education; and have been working on capacity building with the Global Campaign for Education on the UN Tax Convention and the effects on education financing.
Aside from this deeper focus on education, we have also expanded our work into exposing the effects of racism in tax systems and human rights; worked on a short documentary video and brief for the Demotrans EU consortium project on Ireland and Kenya’s lack of incorporation of taxation into their Business and Human Rights Action Plans; presented a webinar with more than 20 grassroots women’s organisations in Brazil; and provided expertise in support of the Global Alliance for Tax Justice Tax & Gender Working Group’s strategy and theory of change for a ‘feminist global, regional and national tax system that resources the full realisation of women’s human rights’.
We also worked with a range of human rights and economic justice partners to deepen analysis of the colonial nature of OECD dominance over international tax rule-setting; and participated in an Expert Group Meeting on the Accountability of Powerful Private Actors in Global Health convened by the UNU-IIGH. The inaugural meeting invited academics working on global public health and a small number of civil society organisations to consider collaborative responses to the threat posed by unaccountable actors in the sphere, including through unchallenged tax abuse.
Our monthly Tax Justice Network podcastscontinue to go from strength to strength. Completely separate productions in English, Spanish, Arabic, French and Portuguese, they are available on the dedicated thetaxcast.com website and on most podcast apps. In 2024 we will be rebranding all our podcasts, and are also planning a new India/Pakistan podcast and hope to launch a Small Island Nation podcast.
This year our podcasts covered a range of topics – on everything from the making of Mauritius as a tax haven; environmental crime and tax havens; organised crime and financial secrecy; progress on a UN Tax Convention; tax reform in Colombia; the election in Argentina of Milei; tax justice and reparations – the Banco do Brasil case; how tax saves lives; monopolies and market power; spoiled pets and private jets; who owns the climate crisis; drug war myths; through to ‘The People’ v. Microsoft.
We are launching a new weekly Tax Justice Network podcast series starting in January 2024, called The Corruption Diaries. It’ll take listeners on a journey through the eyes of anti-corruption veterans, with perspectives on reform and key historical events you won’t hear anywhere else! In the first series we sit down with one of the heroes of tax justice over decades, leading white collar crime lawyer Jack Blum who tells us about his life’s work. You can search on your favourite podcast app for The Corruption Diaries and subscribe there, or find it here.
In addition to ongoing coverage of our flagship materials like the indices and our State of Tax Justice report, our letter to King Charles III prior to his coronation drew media attention to the role of the UK and its network in global tax abuse, as well as linking to the historic injustices behind the UK’s wealth. This builds on our continuing work to highlight the role of tax as a tool of colonial extraction, and also the scope for tax to play a significant role in necessary reparations and ongoing redistribution.
Over the course of 2023, we published 119 blogs (and still counting!). Alongside this, our work featured in more than 314 broadcasts, 2,745 online media mentions, and 246 print pieces in over 140 countries. In July alone, when we published the State of Tax Justice report, our research was covered in 602 articles with a reach of over 5 billion. Over 300,400 sessions occurred on the Tax Justice Network website and our social media posts on Twitter, Facebook and LinkedIn had a combined reach of over 1,545,958.
A changing landscape more than 2 decades in the making
No roundup would be complete without mentioning the significant shift in global tax policy development that 2023 brought with it.
We have long advocated for a more representative, more transparent, and more responsive platform for the development of global tax policy. In November 2023, an overwhelming majority of countries took historic action towards making this a reality. Countries at the UN adopted by a landslide majority a resolution to begin the process of establishing a framework convention on tax, to completely change how global tax rules are decided. The success of the resolution despite the resistance from the world’s strongest economies is a rare feat, and demonstrates the overwhelming demand from countries outside the OECD for the meaningful voice on global tax rules which they have historically been denied.
While this vote was the focus of collective advocacy, important groundwork was also happening elsewhere. Our team members were heavily engaged in the Latin America Summit in Cartagena (working closely both with Ministerial officials in the region, civil society, and UN human rights officials) using Tax Justice Network tools and data to press home the importance of the shift of tax governance to the United Nations. A specific outcome of the Cartagena Summit was the establishment of a Platform on Tax which is chaired by the Colombian Government; and an invitation to join a dialogue with the Chilean Minister of Foreign Affairs, the UN High Commissioner on Human Rights, the UN office coordinator in Chile and the new member of the Committee on Economic, Social and Cultural Rights with a view to keeping the momentum going on truly securing global tax policy development.
The vote marked a turning point, and sets us on an exciting new course in 2024 and beyond, in pursuit of tax justice!
Looking ahead to the next 20 years, we also published our new strategic framework – beyond20. This was important, because – while the last two decades have seen some transformative steps forward – the world remains characterised by pervasive tax injustice. Our policy platform to curb this is summarised as the ABC DEFG₃ of tax justice:
- The ABC of tax transparency (Automatic information exchange; Beneficial ownership transparency through public registers for companies, trusts and other legal vehicles; and public Country by country reporting for multinationals);
- The DE of domestic measures to ensure transparency results in effective accountability (Disclosure of sufficient public data, and Enforcement by well-resourced and operationally independent tax authorities);
- The FG₂ of international elements (Formulary apportionment with unitary taxation, to end corporate tax abuse by ensuring that profits are taxed in the location of the real, underlying economic activity; Governance reform, centred on the establishment of a genuinely, globally inclusive process for the setting of tax rules and standards, under UN auspices; and a Global asset register (GAR), to connect and broaden the range of beneficial ownership registers across all legal vehicles and high-value assets, across jurisdictions, to provide a critical tool against abuse of tax, regulations and sanctions); and
- G₃, Good taxes – a catch-all covering a progressive and effective overall tax system, and significant individual components of the tax justice agenda including wealth taxes, climate-related tax measures, excess profits taxes and minimum effective tax rates.
Global governance changes are crucial to the prospects of delivering policy changes in each area that can finally curb the scale of tax abuse, and address the global inequalities in taxing rights. Our 20th anniversary year was a good one, that has laid the groundwork for even more ground-breaking, paradigm-shifting work in 2024. We’ll see you there!
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New Tax Justice Network podcast website launched!
Submission to the UN Special Rapporteur on extreme poverty and human rights’ call for input: “Eradicating poverty in a post-growth context: preparing for the next Development Goals”
17 January 2024