How local, state, and federal tax policies in the us undermine small business and fuel corporate concentration

The following article is from the “Tax and Monopoly” October 2022 issue of the Tax Justice Focus, an online magazine that explores boundary-pushing ideas in tax justice and revolutionary solutions to the most pressing challenges of our time. Each edition features articles from prominent experts and academics from around the world. The “Tax and monopoly” issue is co-published with the Balanced Economy Project and Roosevelt Institute.

For decades the United States’ tax system has favoured large corporates over locally embedded and competitive firms. The resulting social and economic costs of monopoly are artefacts of the political process and can be reversed by government action.

When Jeff Bezos launched Amazon in 1995, he made securing government favours a core part of his strategy. Chief among these were lucrative tax advantages largely unavailable to his competitors, especially small independent businesses. This disparate tax treatment gave Amazon a pivotal early edge over rivals in the online market. And it’s continued to finance Amazon’s dominance ever since, supplying billions of dollars in
free cash flow that the tech giant has used to fund predatory pricing (systematically selling key goods and services below cost, to monopolise markets) and acquisitions designed to thwart competition.

The opening salvo for Bezos’s tax strategy was locating Amazon’s first headquarters in Washington, instead of California, to avoid sales tax in a populous state. As Bezos explained in 1996, ‘It had to be in a small state. In he mail-order business, you must charge sales tax to customers who live in any state where you have a business presence…We thought about the Bay Area, which is the single best source for technical talent. But it didn’t pass the mall-state test.’

No matter how hard brick-and-mortar retailers competed with Amazon they were hamstrung by the sales taxes they had to collect from their customers. This tax disparity was due to a 1992 US Supreme Court ruling that blocked states from imposing sales tax collection on retailers that lacked ‘nexus’, or a physical presence, in the state. Independent booksellers, later joined by the big chains, campaigned vigorously for Congress to level the playing field, but time and again, Amazon’s lobbyists defeated their efforts.

How much did this tax rule bolster Amazon? A 2014 study of credit card
transactions found that, when a state extended sales tax to Amazon (because it had opened an in-state office or warehouse), households significantly reduced their spending with the tech giant, particularly for
high-priced items.

More telling evidence can be found in the extraordinary lengths Amazon took to preserve this tax advantage. Amazon had employees carry fake business cards to ensure their presence in a state would not trigger nexus.
In Texas, Amazon concealed that it was operating a warehouse from state tax officials. When the state sued for $269 million in back taxes, Amazon
threatened to shut down the facility. The state cancelled the tax bill. In South Carolina, Amazon made a deal with the governor to remain sales tax free despite building warehouses in the state. When the state legislature protested, Amazon halted construction until lawmakers backed down.

From sales tax-dodging to development subsidies and beyond

As Amazon’s logistics growth accelerated, it began building more warehouses in more places, which made it harder to sidestep sales tax.

In 2012, Amazon pivoted to a new strategy for getting the public to finance the company’s growth: development subsidies. As of July 2022, Amazon has been awarded at least $4.8 billion in local subsidies to help it undercut its competitors and fund its expansion.

Amazon has also skirted corporate income taxes in both the US and Europe by establishing a labyrinth of shell companies, which transfer profits to subsidiaries based in Luxembourg, a lucrative tax haven. In 2021, Amazon’s European operations generated 51 billion Euros in sales, but paid no income taxes. The European Commission has challenged Luxembourg’s tax arrangements with Amazon as a form of “illegal state aid” that violates competition policy by favouring one company over others.

However, the Commission has yet to make an effective case to the courts. Meanwhile, in the US, Amazon paid just 6% in federal corporate income tax on $35 billion in reported profits, meaning it avoided paying over $5 billion into federal coffers, according to the Institute on Taxation and Economic Policy.

Through their inaction policymakers have gifted Amazon billions of dollars, giving it a major advantage over smaller competitors that must shoulder fuller tax obligations. They’ve also provided a crucial source of funding for
Amazon’s predatory pricing schemes, enabling it to sell below cost to capsize competitors and lock-in online shoppers.

More recently, Amazon has used its prodigious subsidy-enhanced cash flow to acquire other companies, taking over pivotal technologies to cement its dominance of cloud computing, while buying its way into new industries with a string of acquisitions in groceries, health care, entertainment, and
more.

A Tax Code to Consolidate Corporate Power

Amazon’s strategy offers a road map of how to harness the tax system to
build a monopoly. But most of the giant corporations that now dominate their industries owe their market power in part to government handouts and tax favours. For decades, local and federal US policymakers have systematically structured the tax system to fuel the concentration of
corporate power, at the expense of small businesses, workers, communities, and the economy as a whole.

At every level the tax system works to concentrate economic power and
disadvantage small businesses. Take tax shelters, for example. We know US based multinationals – not just Amazon – deploy elaborate schemes to hide their federal and state tax obligations in places like Luxembourg and the Cayman Islands. But they also do this on US soil. Companies operating in multiple US states shield much of their income from state taxes by transferring in-state revenue as a payment (for rent or use of trademark, for example) to subsidiaries in states that don’t tax corporate income, like Delaware or South Dakota. This maneuvering is not an option for most small, independent businesses, who don’t have a fleet of tax attorneys on their payroll to set up out-of-state subsidiaries.

Local development incentives are another example. Corporations get almost all of the $65 billion to $90 billion a year that cities and states spend on tax breaks, economic development incentives, and other subsidies. In a 2015 study of 4,200 economic development incentive awards in 14 states, Good Jobs First found that large companies collected between 80 and 96% of the dollar value of the funds they analysed. Research indicates that these incentives generally don’t pay off, often failing to increase overall employment while saddling communities with new infrastructure costs.
Many of these deals do not provide a boost to the local economy, but rather undermine the small, independent businesses that are excluded from these tax breaks and incentives and left to finance their own expansion.

Many states have also allowed big corporations to systematically contest their property tax bills. Walmart and other large retailers have paid lawyers to implement a dubious ‘dark store’ theory of value, challenging the valuations of thousands of their stores in multiple states on the
basis that their properties would be nearly worthless if they were empty. This strategy – used against communities across the US
– involves upfront legal costs that large corporations, because of their scale, can easily absorb and are far outweighed by the payout. They have managed to sharply cut their tax bills, which has led directly to funding cuts for local schools, libraries, and other services.

Small is beautiful

Research shows that small, independent businesses often outperform in key
ways. Small banks are better at making productive community-based lending and were much more effective at distributing federal relief loans during the pandemic to independent businesses, for example. Small companies produce 13 times more patents per employee than large companies, and those patents tend to generate better industry impact and growth. The tax code and system of big-corporate handouts are sapping innovation, quality, and local resilience.

When we lose small businesses, we don’t just lose the innovations. A spate of new economic research shows that the high corporate consolidation we’re seeing across different industries is a main driver of declining real wages and job losses. A Harvard Law Review study calculates that a
2018 median US annual wage of $30,500 would be about a third higher – $41,000 – if it weren’t for monopsony concentration. Corporate dominance over our supply chains has also helped make them brittle, and opportunistic price gouging by megacorporations is a primary driver of the recent surge in inflation. Small businesses are integral to healthy
communities and our democracy. As locally owned businesses disappear,
communities of all kinds lose their sense of social connectedness and collective agency. Industrial agriculture, for example, has devastated rural communities in the US and is linked to higher rates of crime and declining social cohesion. When retail chains like Walmart dominate the local economy, they undermine civic participation and social capital. Monopolies of all kinds disproportionately harm Black and Brown communities. Fossil fuel conglomerates and the big electric utilities have hindered our ability to address climate change. Amazon and Comcast exert so much power over our political system that efforts to help our society are continually crushed by powerful lobbying efforts. On the other hand, small businesses disaggregate economic power, create a more equitable distribution of income and wealth, and nurture democracy by fostering community self-determination.

An Antimonopoly Tax Agenda: Politics and Policy

If pro-monopoly tax policy is bad economics, it’s even worse politics for progressives. Although long forgotten today, the Democratic Party once counted small business as a key constituency alongside workers, and steadfastly fought for their rights and welfare. This helped win New
Deal programs that secured, in the words of FDR, “economic freedom for the wage earner and the farmer and the smallbusiness man.”

But in the 1970s and 1980s, an ascendent faction of Democrats abandoned their party’s concern about concentrated economic power, and many liberals began distancing themselves from both labor and small business. This created a vacuum for the US Chamber of Commerce, which used small businesses’ frustration and lack of a political home to drive a right-wing agenda.

If US progressives advance an antimonopoly tax agenda, they can recover a populist politics, which would help them compete in rural areas and swing states, drawing in voters who are yearning for a fairer, more equitable economy. Stronger tax and spending policies, at every level of government, is an essential spoke on the wheel of strong antimonopoly reform. When
our tax system is built to foster fairness and justice in addition to vitality and economic growth, it can help to restructure economic power and more broadly distribute and boost prosperity.

Small business should be at the centre of an antimonopoly tax agenda. Yet it’s rarely brought under the tent of rebuilding our tax system to be fairer, despite that it is inherently good for small business – and small business is so good for a robust, resilient, vital economy. That means designing policies that close monopoly tax loopholes – in part, to eliminate global and state tax shelters – and redistribute tax obligations to level the playing field for small business and curtail corporate concentration. It also means helping small
business rebuild from the damage done by providing targeted support for smaller competitors.

Combatting monopoly power is not only a matter of reinvigorating antitrust policy. We must also address the many ways in which neoliberal policymaking has favoured corporate consolidation at the expense of local economies. Using tax policy to foster fair competition and decentralise economic power should be high on this list.

Antimonopoly Tax Reform: Policy examples

Implement a Progressive Corporate Tax Rate

One potent antimonopoly tax reform measure would be a progressive corporate tax rate. As Reuven S. Avi-Yonah argues in this issue of Tax and
Monopoly Focus, the primary reason we need a corporate tax is to limit the ‘power and regulate the behavior of our largest corporations,’ which is
the same reason the US first adopted the corporate tax in Instead of a flat tax, he proposes that the tax should be 0 for normal returns that reflect fair markets and increase sharply to target the high profits indicative of monopoly rents.

Raise Taxes on Shareholder Payouts

We need to more fairly tax where the bulk of profits of megacorporations go — shareholders. Shareholder payouts in the form of stock dividends and share repurchases are taxed at a lower rate than workers’ income tax. The tax preference for capital should be eliminated and these different forms of income treated as equivalent by the tax code. It is also important to unlock these tax revenues on a more timely basis, as the current system fails to impose a tax until the stock is realised. A mark-to-market capital gains system could release this revenue annually. (As a side note: The Inflation
Reduction Act, enacted into law in August 2022, imposes a 1% excise tax on some repurchases of corporate stock by publicly traded companies. While the tax provides a clear legislative signal that stock buybacks are problematic, progressive analysts generally agree it is not enough. In fact, economists William Lazonick and Lenore Palladino argue stock buybacks
should be banned altogether.)

Adopt Worldwide Combined Reporting to Close State and Federal Tax Loopholes

A simple way for states to address tax dodging is to implement a ‘Worldwide Combined Reporting’ system, which requires companies to
report their total global profits and pay a tax on the portion of those profits produced in a given state. For example, if 5% of a company’s global business occurs in Montana, then Montana’s corporate tax rate would apply to 5% of the company’s taxable profit. Only a few states – Idaho, Montana, and
North Dakota – currently utilize worldwide combined reporting, which ensures transparency on large companies, levels the competitive playing field for independent businesses, and can help generate public revenue.
Meanwhile, twenty-eight states and Washington, D.C. have adopted ‘water’s-edge’ combined reporting only, which applies the same principles but excludes affiliates of the conglomerate that are incorporated outside of the United States or that conduct most of their business outside the US implementing worldwide combined reporting
– at the state and federal level
– would buttress the current reporting system by building and synthesising transparency on the full extent of multinational corporations’ tax liabilities.

Close the Dark Store Tax Loophole

States should adopt legislation clarifying how tax assessors determine the property value of big-box stores. The dark store tactic has not only deprived
local governments of billions in revenue, but it has also forced local businesses and residents to pay higher taxes to maintain services. States can address this with a simple clarification that modern retail buildings
must be valued based on their current operations and not on a theoretical future in which they are decrepit.

Stop Subsidising Corporations and Invest in Small Business

Instead of giving subsidy deals to corporations that are channeling their profits to Wall Street, local municipalities and states can use those funds to
circulate dollars locally and drive long-term growth For example, local governments can invest in real estate for commercial use and public
goods like high-speed fiber networks, and provide carefully targeted loans to Black and Brown entrepreneurs to close the racial entrepreneurship gap.

Stacy Mitchell is co-director of the Institute for Local Self-Reliance and directs its Independent Business Initiative, which produces research and analysis, and partners with a broad range of allies to design and implement policies to reverse corporate concentration and strengthen local economies.

Susan Holmberg is a political economist and the Senior Editor and researcher of the Independent Business Initiative at the Institute for Local Self-Reliance. She writes on corporate power and inequality.

Reframing tax policy to reset the rules of the monopoly game

The following article is from the “Tax and Monopoly” October 2022 issue of the Tax Justice Focus, an online magazine that explores boundary-pushing ideas in tax justice and revolutionary solutions to the most pressing challenges of our time. Each edition features articles from prominent experts and academics from around the world. The “Tax and monopoly” issue is co-published with the Balanced Economy Project and Roosevelt Institute.

Monopolists and rentseekers have been running rings round the democratic fiscal state for decades. It is obvious to everyone that the game is rigged. But we still have a few more rolls of the dice. Let’s use them wisely.

The earliest known version of Monopoly, called The Landlord’s Game, was designed by an American women’s rights and anti- monopoly advocate, Elizabeth Magie, in 1902. She invented the game to illustrate the economic consequences of rent-seeking and the value of wealth taxation to discourage large agglomerations of economic power.

The instructions included a graduated tax table, with increasing marginal rates depending on property/wealth, and the funds went back to pay for basic necessities of all the players. In this first version of the Monopoly game, everyone won when the poorest player doubled their original stake. Compare that to today’s rules of the Monopoly game, where the goal of the game is financial domination. Paying income taxes is purely bad luck, and when you are forced to contribute, the proceeds just go back to the bank – helping no one.

Elizabeth Magie’s The Landlord’s Game (1902).

Different eras, different rules of the game, very different conceptions of the role and the value of taxing entities with excessive market power.We begin this issue of Tax and Monopoly Focus with this bit of folk wisdom to show not just how far back the relationship between tax policy and anti- monopoly goes in the public conscience, but also to illustrate that the current tax rules – which exacerbate corporate consolidation – are not natural or necessary. They are in fact long due for a rethink and a re-write.

Before jumping into this rethinking, we might well start with some of the ways in which current tax rules incentivise and otherwise actively subsidise the growth of corporate oligopolies.

First, current international tax rules and the presence of tax havens work to boost after- tax profits for globally-integrated large firms. Smaller domestic competitors who cannot engage in the same sort of regulatory arbitrage are at a structural disadvantage.

The mere size and complexity of large, global corporate structures with many subsidiaries worldwide allow these entities to befuddle tax auditors and essentially prevent equal enforcement of tax laws. This is frustrating enough for richer countries: just think how much harder it is for revenue authorities in lower-income countries. Simply put, the more complicated the corporate structure, the less enforceable the tax code is. The bigger you get, the less likely you’ll have to pay tax.

Second, and relatedly, the tax code and its enforcement are particularly vulnerable to lobbying by concentrated special interests, such as incumbent corporate oligopolies. Again, this is troubling enough in wealthy nations; lower-income countries are even more susceptible. Indeed, the more profitable and more incumbent a corporation becomes, the more is at stake in the formation and enforcement of tax policy. Lobbying for lower taxes may indeed be inefficient economically, as Professor Philippon has argued,2 but changing tax laws and how they are enforced becomes a premium when a corporation becomes a highly-profitable incumbent.

Third, the flat corporate income tax rate – as it exists today in the US – is facially neutral between small and large firms. But given the exorbitant tax privileges large, incumbent firms have in practice, a statutorily flat rate in reality means a much lower effective rate for larger, global firms compared to smaller, domestic ones. Given all the other tax advantages of bigness, this de jure equal treatment creates de facto advantages for large, incumbent firms. Further, by taxing the first dollar of firm profit the same as excessive profits gained from rent-seeking, a flat rate effectively incentivises super-normal rent-seeking by dominant firms.

Fourth, unlimited corporate interest deductions (until recently in the US, and this is still being battled in the EU) allow for highly-leveraged buyouts that wouldn’t be done without such tax deductions.

Finally, the US Federal tax code for over a century has subsidised many merger and acquisition (M&A) deals via what’s called a tax-free reorganisation, which allows sellers to defer (sometimes indefinitely) the gain from their sale to avoid tax liabilities.3 This implicit subsidy incentivises corporate consolidation, with little if any redeeming economic or societal value.

In Udo Kepler’s 1911 cartoon William Taft wonders why his Attorney General George Wickersham can’t keep the monopolists from springing back every time he hits them with the Sherman Act.

Just as today’s tax system contributes to corporate consolidation, so then too can our tax policies help restructure the economy to disrupt concentrated economic power and drive a more dynamic, multi- player economy. This special edition collects five timely contributions which help to diagnose the role our tax code can have to deconstruct and deter excessive market power as a complement to a more assertive anti-monopoly agenda.

Susan Holmberg and Stacy Mitchell brilliantly chronicle Amazon’s tax break-financed rise to retail dominance, a vivid illustration of how a broken tax system has helped spawn a 21st century monopoly.

Reuven Avi- Yonah’s proposal of a steeply progressive corporate income tax rate to tax away excessive profits, as well as George Dibb’s critical eye toward taxing rents, would both help ameliorate the functionally unequal tax treatment between large and small firms while simultaneously helping curb harmful consolidation.

Allison Christians’ contribution digs into the conceptual, philosophical and ultimately political waters of how to distinguish normal from excess, windfall or otherwise abnormal profits. And my piece with Emily DiVito explores how an individual wealth tax on America’s top Billionaire ‘blockholders’ could curb their drive to use their companies to capture excess market power.

The standard approach of competition policy – a public interest-minded interpretation and robust enforcement of antitrust laws alongside the deployment of public options to outcompete private incumbents – remains extremely valuable.

But competition policy in isolation shouldn’t have to do everything. This collection aims to help re-envision tax policy as a complementary anti-monopoly tool to curb corporate consolidation and re-balance our economies. Just like the rules of the original Monopoly game once did.

As Director of Corporate Power at the Roosevelt Institute, Niko Lusiani leads the think tank’s program to dissect and dismantle the ways in which extractive corporate behaviour jeopardises workers, consumers, our natural environment, and our shared economic system.

Doações milionárias à campanhas prejudicam democracia: the Tax Justice Network Portuguese podcast

Welcome to our monthly podcast in Portuguese, É da sua conta (‘it’s your business’) produced and hosted by Grazielle David and Daniela Stefano. All our podcasts are unique productions in five different languages – English, Spanish, Arabic, French, Portuguese. They’re all available here. Here’s the latest episode:

Doações milionárias à campanhas prejudicam democracia #42:

A democracia é fundamental para que a economia funcione para todas as pessoas. E as eleições diretas são a sua base. Mas sem dinheiro é impossível dar visbilidade a um concorrente e, portanto ter chances de ganhar as eleições. Qual é a forma mais democrática de financiar eleições? E qual a influência de doadores de campanha no resultado eleitoral ou na elaboração de políticas públicas caso o candidato apoiado vença?

Às vésperas do segundo turno de eleições à presidência no Brasil, entrevistados do episódio #42 do É da Sua Conta respondem a estas questões e explicam os riscos à democracia quando campanhas eleitorais são financiadas por doadores super ricos, especialmente àqueles envolvidos em abusos fiscais.

Você ouve no É da sua conta #42:

“Quando as preferências políticas divergem entre quem tem as rendas mais baixas, médias e altas, o que se vê é uma influência significativa dos que têm rendimentos mais altos, enquanto que não há nenhuma influência daqueles que têm rendimentos mais baixos.” ~ Martin Gilens, professor de Políticas Públicas, Universidade de Princeton – EUA

“Por que uma pessoa rica ou uma empresa daria muito dinheiro a um político? Porque esperam que o político lhes faça um favor quando ele chegar ao poder. Talvez um grande corte nos impostos, ou um grande contrato governamental. Isto é corrupção, é muito prejudicial ao país.” ~ Nick Shaxson, Tax Justice Network

“Esses jeitinhos de se burlar a legislação eleitoral (risos). O que a gente está vendo? Doação de pessoa jurídica personificada. Bolsonaro recebe a doação dos empresários; não recebe das empresas, mas recebe dos empresários.” ~ Maíra Recchia, presidenta do Observatório de Direito Eleitoral, OAB –SP

“A prevalecerem projetos de lei e medidas provisórias que alteram os julgamentos de questionamentos tributários,  nós teremos um benefício de certas pessoas particularmente em prejuízo de toda uma sociedade. Isso sim evidencia uma certa instrumentalização do poder político por parte de um poder econômico. ” ~ Isac Falcão, presidente do Sindifisco Nacional

Participam desse episódio:

~ Doações milionárias à campanhas prejudicam democracia #42

Saiba Mais:

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Imagem: “Santa Catarina, south Brazil” by Doug Scortegagna is licensed under CC BY 2.0.

UN committee hears evidence of harms of Swiss financial secrecy on women’s rights

Today, the 83rd session of the Committee for the Convention on the Elimination of All Forms of Discrimination Against Women (CEDAW) will begin to review Switzerland’s fulfilment of their obligations to women’s human rights under the Convention. We have submitted a report, together with our with partners at Alliance-Sud and the Center for Economic and Social Rights (CESR) with the purpose of drawing the committee’s attention to the negligible progress made towards financial transparency and the duties born by the state party to women’s and girls rights. Our previous joint submission in 2016 to the CEDAW committee asked awkward questions about Switzerland’s financial secrecy. We urge them to be asked again.

In 2016, we put to the CEDAW committee the relevance of Switzerland’s role as one of the world’s leading financial secrecy jurisdictions and how this undermines the abilities of governments elsewhere in the world to fulfil their obligations to women’s rights. Six years later the Financial Secrecy Index 2022 confirmed Switzerland remained one of the most significant suppliers of secrecy, only surpassed by the United States.

The 2016 submission argued:

“that Swiss policy and practice in the tax and financial domains calls into question Switzerland’s compliance with its obligations under Article 2 of CEDAW—read in conjunction with its duties as a State party to other international human rights treaties, including the International Covenant on Economic, Social and Cultural Rights (ICESCR)—to realize women’s rights both within and outside its territory.”

Moreover the submission underscored that the obligation included Switzerland’s duties to:

“refrain from making laws and policies which directly or indirectly result in the denial of women’s equal enjoyment of their rights, extraterritorially as well as within its jurisdiction; to protect against private conduct that has such effect, including through the regulation of the banking sector and other private actors subject to its jurisdiction; and to cooperate internationally to mobilize the maximum available resources for the universal fulfillment of women’s economic, social, and cultural rights and to create an international enabling environment conducive to this goal.”

“Switzerland needs to strip away and reform its financial secrecy laws and recognise the deep harm they cause to the rights of women and girls in other countries – especially low income countries”. (Kate Donald, Director of Program, Center for Economic and Social Rights).

The joint submission the CEDAW Committee will review this week calls on the committee to ask Swiss government these three questions:

  1. Does the State party intend to conduct an independent study of its own responsibility for those tax abuses, by assessing the impacts of its tax and financial secrecy policies on the resources available for the fulfilment of women’s rights and substantive equality overseas, in line with its obligations under CEDAW and as recommended by the Committee in 2016?
  2. How will reforms to financial secrecy and corporate tax policies in Switzerland further the realization of women’s rights and substantive equality overseas, particularly in developing countries? More specifically, what efforts are being made to ensure that the countries hardest hit by cross-border tax abuse, with the greatest deficits in terms of resources available for women’s rights and gender equality, are among those entitled to exchange of taxpayer information with Switzerland?
  3. What is Switzerland doing to improve the transparency of legal persons and arrangements and thus to guarantee the existing financial framework of policies and laws are not used for channelling illicit financial flows?

Education rights and tax justice: the Tax Justice Network podcast, the Taxcast

Welcome to the latest episode of the Tax Justice Network’s monthly podcast, the Taxcast. You can subscribe either by emailing naomi [at] taxjustice.net or find us on your podcast app.

In this episode: Nelson Mandela famously said, “Education is the most powerful weapon which you can use to change the world.” Yet millions of children in the world still don’t even get to walk through the school door. This month on the Taxcast host Naomi Fowler looks at education and tax justice. The challenges, and the ways forward.

Plus, we explore two important developments which really pushes forward steps towards a UN Tax Convention: the economic commission for Africa, the declaration of their finance ministers calling for the UN to begin negotiations on the convention (that’s more than a quarter of the member countries of the United Nations) plus the head of the United Nations has pledged his support for negotiations. How will wealthier nations, who are too often the world’s worst offenders for draining tax revenue from other nations, now respond?

Featuring:

Transcript available here (some is automated)

~ Education rights and tax justice

Investing in education is probably the soundest investment you can make, economically as well as socially and we are not going to make a breakthrough until we get serious about talking about tax.”

~David Archer, Tax Education Alliance

What tax justice can do is explain to the wider public, to people in policy development, to governments, stakeholders, the impact of tax justice on the right to education, as a result of tax revenue that’s lost by government, what the scale of it is and who’s responsible for the situation where tax revenue is lost from government, tax that corporations or the super rich could be paying”

~ Liz Nelson, Tax Justice Network

Are we at the point where after 10 years of the OECD’s corporate tax reforms really not delivering anything concrete, even OECD members are willing to try something that’s a bit more transparent, a bit more democratic, and a lot more inclusive, and might actually end up being effective for everyone?”

~ Alex Cobham on the latest developments towards support for a UN Tax Convention

Image: “Bali School Children” by Mark Fischer is licensed under CC BY-SA 2.0.

Further Reading:

To protect children’s right to education, governments must fight tax abuse
UN Secretary General signals support for UN tax convention

Here’s a summary of this latest Taxcast episode:

Nelson Mandela famously said, “Education is the most powerful weapon which you can use to change the world.” Yet millions of children in the world still don’t even get to walk through the school door. In this episode of the Taxcast we look at education and tax justice. The challenges, and the ways forward. Most of us have a story to tell about teachers who changed our lives and inspired us. Taxcast host Naomi Fowler asked her family for theirs:”

Speaker 1: “Oh yes, my history teacher was brilliant, this was in my first year in secondary school and he wanted to teach us about the fall of the Roman empire so instead of telling us about it, he basically acted out the whole of the fall of the roman empire as if he had loads of plates on sticks, and he ran up and down the classroom pretending to spin all these plates and showing how there were so many plates spinning that they gradually started falling off and that was my history lesson and I’ve never ever forgotten it – how empires collapse. And I attribute to that the beginning of my interest in colonialism.”

Naomi: “That’s my sister. I was lucky enough to have the same teacher – Mr Smith he was called, he really fired our imaginations and helped us do things like create an imaginary nation where we all held positions of power and planned how we would run things – we called it the nation of Rumthovia. He really made us think. Here’s my parents teacher memories:”

Speaker 2: “Mr Kirkham was a very dapper and quite small man and he was our music teacher. He taught me how to sing and since I’ve been deaf-ish all my life, it’s had a particular value for me. I’m quite quite sure in my own mind that it’s helped me with my hearing. He encouraged us to form a music society. He also used to invite former concert performers who’d come along and perform for us and I used to sit there with my eyes closed concentrating on music and that has stayed with me all my life. I cannot tell you how valuable for me that has been.”

Speaker 3: “My idea of an inspiring teacher is my music teacher and her name was Miss Ward, Betty Ward, I had a wonderful music education with her, she taught us the history of music, the development of music through the ages. I’m now at the age of 76 and I’ve never forgotten anything that she taught me. Something reminds me of her every single day. I’ll never forget her and I’ll never forget the influence she’s had over my life.”

Naomi: “Our teachers live on forever, don’t they? Education changes everything. Article 26 of the United Nations Universal Declaration of Human Rights is supposed to help guarantee the right to a free education for girls and boys. Most countries are signed up to that. It’s a UN sustainable development goal. Yet according to UNESCO about 258 million children and young people aren’t in school – a staggering 59 million children of primary school age, 62 million of lower secondary school age and 138 million of upper secondary age. That’s a

failure of government, for sure. But it’s also a question of resources. And that means we have to look at the tax systems, not just those of the nations facing the most challenges, but the global tax system too. We need to focus on some of the wealthiest governments and financial institutions that play such a central role in denying children’s right to education by blocking fairer tax reforms and failing to tackle the financial secrecy that’s bleeding continents dry. In so many ways it’s a continuation of colonial extraction. Liz Nelson of the Tax Justice Network:”

Liz: “What’s important about what tax justice can do is about explaining to the wider public, to people in policy development, to governments, stakeholders, what is the impact of tax justice on the right to education, as a result of tax revenue that’s lost by government what the scale of it is and who’s responsible for this, who is complicit in facilitating tax abuse that denies the right to education and who’s the main people, organisations, institutions who create a situation where tax revenue is lost from government, tax that corporations or the super rich could be paying and how they use the financial architecture, including secrecy jurisdictions, or tax havens to evade and avoid tax.”

Naomi: “So let’s do some number crunching. Worldwide, countries are losing at least $483 billion in tax a year to global tax abuse to the deep pockets of multinational corporations and wealthy individuals. The Tax Justice Network has worked with the GRADE project to link the harms that’s doing specifically to children’s lives:”

Liz: “What we’ve done to try and illustrate the impact of tax abuse on fundamental human rights and in this case the right to education is have a look at low income countries and middle income countries, and look at the numbers of children who are not in primary school and could be in primary school if tax wasn’t lost to those countries.”

Naomi: “So, this research looks at 63 low income and lower middle income countries where 41 million of their children are not in primary school. Each one of those children out of school is a life and family tragedy. It’s also a national tragedy. Those 63 lower and lower middle income nations are losing an estimated $30 billion a year in tax revenue because of tax abuse by corporations and the super-rich. Recouping that revenue would mean millions of those children could be sitting in classrooms right now, as I speak. For a long time when it comes to funding education in lower income nations, the attention has tended to focus on aid. But that’s a mistake, says David Archer of the Tax and Education Alliance:”

David: “97% of the financing for education comes from domestic sources. Only 3% of global financing comes through aid or loans or any of the different sort of international initiatives that are created. And yet, in every international meeting on education, people spend 97% of their time talking about the 3% about international aid, they don’t talk about the domestic financing agenda and how you can really make a breakthrough. There’s a desperate shortage of financing, and we are not going to make a breakthrough until we get serious about talking about tax. And we’ve really been working to shift that framing and recognise that the education community need to become powerful advocates for increasing the size of the pie, looking at tax policy and at increasing revenues through taxes.”

Naomi: “In September 2022, there’s been an unprecedented gathering of heads of state to discuss this global crisis in education at the UN. David Archer was there:”

David: “This was going to be the first time ever that presidents and prime ministers gathered to talk about the financing of education. Whenever you have an international meeting on education, you get the sort of ministers of education, but you don’t get heads of state, and so it was an incredibly important opportunity to convene heads of state. So this was getting education financing out of the education bubble, out of the education bubble, and into a sort of wider dialogue. It gave an opportunity to talk about the strategic financing issues and not just look sort of myopically, in a very nano way at education financing that historically has been the case.”

Naomi: “Yeah. And we know from our work on tax justice, having worked in sort of so many intersections with so much amazing campaigning work happening all over the world on all kinds of rights and how to tackle inequality, we know that tax isn’t always something that they’ve incorporated fully into their work.”

David: “Yeah. At this summit we did succeed in getting a much more strategic framing to the dialogue on education financing. We talked about tax, we talked about debt, we talked about austerity and macroeconomic policies. We talked about public sector wage bill constraints and the impact that has on teachers. And we ended up with a finance call to action, which I think is really a very bold agenda, which reframes how the education community needs to think about and talk about financing and the action that is needed. And the action needed from the international community is not just creating a new pot of money, a new aid, but it is about how do you change and contribute to changes to the global tax rules and the way in which they’re set and the way in which they’re enforced? Changes to debt, changes to the macroeconomic policy advice from the IMF and particularly changes to how investment in education is understood as something which is genuinely an investment, rather than just as sort of spending on education being treated as consumption. Because education has such a dramatic, longer term effect on all other aspects of development. Investing in education is probably the soundest investment you can make, economically as well as socially.”

Naomi: “Absolutely. And, let’s talk about the IMF. They were invited. They didn’t attend?”

David: “The IMF managing director Krystalina Georgieva was supposed to be on a panel on the financing agenda together with me and some heads of state. Two days before the summit, she withdrew without giving a very good reason. So we actually ended up with, I think it was the Global Student Forum started putting up wanted posters on social media and missing posters, calling her out for that. And I was rather pleased in fact that Christiane

Amanpour on CNN the next day challenged Krystalina Georgieva, she said to her directly, ‘you were invited to this summit to talk about education for the first time of strategic discussion, and you didn’t turn up. Why?’ So I, I think the pressure is certainly being felt, uh Krystalina Georgieva said, ‘Oh yes, well, I wasn’t at the panel, but I am on the job.’ And we are now trying to hold her to that and instigate over the coming months and hopefully on a sustained basis, a serious dialogue with the IMF. In this whole history of education summits, the IMF has never been at the table once, and yet the strategic framing of education of financing is all shaped by the IMF, it’s policies around tax. And if the IMF is not bold and ambitious at country level in supporting countries to expand tax revenues in a progressive way, then how do you finance expansion of education? At the moment, the IMF solution every time is cut spending, rather than increase revenues. And that’s the fundamental choice that people have to make. And every time, at country level in practice, it’s cut spending. And the flagship policy of the IMF in its, in its sort of austerity policies, is constrain or cut the public sector wage bill. And that is particularly devastating for education because the largest single group on the public sector wage bill are teachers, and the largest, like 75 to 90% of spending on education, is on teachers. So if you are being told to constrain your overall spending on the public sector wage bill, it’s impossible to achieve without freezing or cutting spending on teachers. And if you freeze or cut spending on teachers, then you are, that’s, that’s the biggest cost and the most important part of the education budget. So you can’t make progress on education if you don’t change that mindset, move away from public sector wage bill constraint and actively, in fact actively encourage countries to spend more on the public sector wage bill because it’s part of a transformation towards development. So the IMF has to come to the table. I think we will force them to the table. I think we, we are very close to getting them to come to the table seriously. Um, and, uh, and that will make a massive breakthrough. Cause it is also their policy advice on tax, you know, the fact that their routine default is just to support, you know, increases in value added tax rather than more progressive forms of tax. You know, we want to see progressive spending on education, which is a redistributive in itself, and it should be financed in a progressive and redistributive way as well.”

Naomi: “Yeah, I mean the IMF as you say, it’s consistently made austerity a condition of financing packages to nations which haven’t got many places to turn, has caused real desperate human suffering. I mean, what you’re talking about is the absolute opposite of what they seem to stand for. So, you say you can bring them to the table that’s encouraging and positive in some ways, but what can be achieved in spite of theIMF?”

David: “Well, in the end it’s a battle country by country, in the end is about influencing national governance and ministries of finance to recognise that there are alternatives to the policy advice of the IMF. And popularising the idea that you don’t have to follow that IMF advice. See, the, the biggest power of the IMF is its sort of coercive policy steer through its surveillance reports, which happen sort of every six months, pretty much. It’s not always the loan conditions, so, you know, a smaller number of countries actually take loans and therefore have difficult conditions imposed. But the steer, the economic steer, the mindset, the shared ideology I think between the international monetary fund and most ministries of finance is the root cause of the problem. Now, we can’t hold the IMF to account ultimately ‘cos there is no effective mechanism for doing so. They’re not a democratically accountable institution. National governments are in most cases. And so we can put pressure on ministries of finance to look at alternative economic policies, think about different trajectories and have the confidence to stand up to the IMF. But to achieve that, you need really broad alliances in national civil society holding the government to account. And that’s where we need the people who are working in the tax of fiscal justice agendas to come together with the people working on education, on health, on other public services. Unless you’ve got a broad enough coalition that is working coherently and consistently to demand alternative policies, it’s actually very difficult to achieve. So that, that is where I think the change will happen. We can in the meantime expose some of the contradictions in the IMF because the IMF produce some nice policy documents and research documents globally, and then they ignore all of those when it comes to the country advice that is being enforced. So exposing that contradiction, I think is important. Um, uh, but let’s not hold out for the, too much hope for the IMF to suddenly convert into a progressive institution!”

Naomi: (laughs) Yeah. Yeah. I mean, it’s true that with such an enormous institution, it seems, very often seems like the left hand doesn’t know what the right hand’s doing, there’s so much different thinking within that institution, but, you know, ultimately it’s not translating into the active policies that we would like to see. But there’s some routes forward. So tell me, what commitments have been made, if any, as a result of this summit and the conversations around it, and what happens next?”

David: “So we have a finance call to action that came out of the summit, which reaffirms the existing commitments that countries ought to be spending 20% of their national budgets on education or 4 to 6% of GDP, but makes really bold new commitments as well about taking action on tax, both nationally to raise tax revenues and progressive ways to finance education and other services, but also international action, for example, for a UN tax convention. And it was wonderful that the Secretary General of the United Nations really lent his support to a UN tax convention, which had been called for by the Africa Union Ministers of Finance. But it’s a really, I think, important moment. So you need national action and international action on tax. You need the same really on debt, you know, there’s so many countries who are spending more on debt servicing than they are on financing education or health. That is madness. There needs to be a major new multilateral debt initiative, and there need to be new debt workout mechanisms. The call to action made that very, very clear, as it also directly challenges the IMF to move away from the austerity policies that are squeezing spending on education.”

Naomi: “Yes, always too much talk about costs of financing education when it is actually investing in education, and in children. Let’s talk for a minute about some new developments this month around the campaign the Tax Justice Network has been pushing for many years, a UN tax convention. That would help wrest control of the power to decide global tax rules to the UN, moving it away from the wealthiest nations at the OECD who are often the world’s worst offenders for sucking tax revenue from lower income countries. A UN convention would be consistent with UN human rights principles and should offer a fairer place at the table for less economically powerful nations. There’ve been two major developments on that recently which give cause for hope. Here’s Alex Cobham of the Tax Justice Network:”

Alex: the context for these two things happening is that we’ve seen political leaders move. So back in May, we had the economic commission for Africa, the declaration of their finance ministers, and that’s more than a quarter of the member countries of the United Nations calling for the UN to begin negotiations on the convention. And then at our event with the Global Alliance for Tax Justice, at the start of September, the new Colombian finance minister also backed that call. So the two things that have happened since is really in a sense, the UN system starting to reflect these political demands.

First, we had a major report from the UN Secretary General Antonio Guterres, and he laid out exactly the case for a UN convention showing in some detail how the OECD and all of the related institutions are really not very close to being globally inclusive, how they keep out a great many particularly lower income countries, in addition to not being highly effective, even for their own members. So that’s the Secretary General pledging to support negotiations if the General Assembly decides to go ahead.

And now we’ve had the other shoe dropping, which is that we have a draft resolution presented at the, the General Assembly Second Committee, which is the, the Economic and Financial Committee. And that’s a resolution that simply calls for the beginning of negotiations and for the UN system to support those. That’s an interesting development in a couple of ways. You know, we, we have this ping pong thing at the General Assembly every so often where perhaps the G77 group of countries will bring forward a proposal of this sort, for an intergovernmental tax body. And then OECD member countries like the United States often, uh, Lichtenstein is kind of a key player for some reason, and the EU as a block and the UK will tend to block those proposals before they go anywhere. But these are when they’re effectively one paragraph in a bigger resolution, and that’s quite easy to get deleted. In this case, we have an entire resolution who’s only purpose is to begin negotiations, so you can’t really tweak it and get rid of the bit you don’t like. You’re going to have to block the whole thing if that’s what the OECD countries choose to do. And that’s going to become increasingly public. So we’ll have negotiations over the next month or so about the actual text. If there is some agreement at that stage, and particularly if the G77 force the question, then it will go to a full session of the General Assembly at the beginning of December for a vote.

So the G77 is more or less the group of lower income countries, in most cases, actually former colonies of the, the high income countries, which is of course, how the high income countries became high income and how everyone else became lower income! But there are 134 UN uh, member states who are members of the G77 and 190 something members in total. So the G77 always have the numbers if they decide to do something together. Now, in this case, the G77 hasn’t put forward this resolution. We’ve heard that Singapore may have, um, prevented unanimity, but it’s always a bit difficult to know what’s going on behind closed doors. However, your expectation is that because they’ve repeatedly supported these measures in the past, almost all of the G77 would support this. And so that just brings you back to the OECD.

Now, the G77 know that they’ve got the numbers, but they want the OECD countries to come with them and, you know, negotiate in good faith. And the question is really, will they, will we see Germany, Spain, will we see less likely perhaps the UK, maybe the US – will they support this? Will they block it? Will they stand back and let it go through without supporting? We’re gonna find out all of that in the next couple of months. And for the first time, really those major high income countries are going to have to pin their colours to the mast. They can’t block this in private anymore. So we’re going to see if they’re willing to, to block it publicly, or even to get behind it.

Will those high income countries continue to try to block this en masse and sort of insist on trying to keep making the decisions in their own club at the OECD, even though that’s been shown to be pretty ineffective for them, never mind for anybody else. Or are we at the point where, you know, after 10 years of the OECD’s corporate tax reforms really not delivering anything concrete even OECD members are willing to try something that’s a bit more transparent, a bit more democratic, and a lot more inclusive, and might actually end up being effective for everyone.”

Naomi: “David Archer of the Tax Education Alliance:”

David: “We are very energised. We need a very powerful movement to be able to hold governors to account. And so there’s a lot of work about how do we strengthen the global movement on education, bring together the teacher unions and student union movements and youth activists with national education coalitions that exist already in over a hundred countries, national education coalitions holding their own government to account. But that movement then needs to link with the wider movement, defending public services as a whole and the financing of public services.”

Educación, derechización, inflación y justicia fiscal: October 2022 Spanish language tax justice podcast, Justicia ImPositiva

Welcome to our Spanish language podcast and radio programme Justicia ImPositiva with Marcelo Justo and Marta Nuñez, free to download and broadcast on radio networks across Latin America and Spain. ¡Bienvenidos y bienvenidas a nuestro podcast y programa radiofónico! Escuche por su app de podcast favorita.

En este programa con Marcelo Justo and Marta Nuñez:

INVITADOS:  

~ Educación, derechización, inflación y justicia fiscal

MÁS INFORMACIÓN:

[Imagen: “School children walk hand in hand” by World Bank Photo Collection is licensed under CC BY-NC-ND 2.0.]

Tax Justice Network Arabic podcast #58: بين العدالة الضريبية والإنفاق على التعليم

Welcome to the 58th edition of our Arabic podcast/radio show Taxes Simply الجباية ببساطة contributing to tax justice public debate around the world. It’s produced and presented by Walid Ben Rhouma and is available on most podcast apps. Any radio station is welcome to broadcast it for free and websites are also welcome to share it. You can follow the programme on Facebook, on Twitter and on our website.

في العدد #58 من بودكاست الجباية ببساطة أثرنا موضوع التنمية المستدامة للتعليم على هامش قمة تحويل التعليم. في الحلقة حاور وليد بن رحومة الاستاذ رفعت الصباح رئيس الحملة العالمية للتعليم والأمين العام للائتلاف العربي من أجل التعليم للجميع حول نصيب قطاع التعليم من الإنفاق الحكومي في العالم والمنطقة العربية وسبل إصلاح فجوة التمويل والتي تتسبب في إنقطاع 1,5 مليار طفل عن المدرسة.في أخبارنا المتفرقة إقترب صندوق النقد الدولي من إقراض تونس ومصر دون التصريح بقيمة القرض، مقابل تواصل تدهور الاوضاع الإقتصادية والإجتماعية في لبنان.

In #58 of Taxes Simply, Walid bin Rhouma interviews Mr. Rifaat Al-Sabah, President of the Global Campaign for Education and Secretary-General of the Arab Coalition for Education about sustainable development in education on the sidelines of the Education Transformation Summit. Al-Sabah tackles issues including the education sector’s share of government spending globally and in the Arab region, and discusses ways to fix the funding gap that causes 1.5 billion children to drop out of school.

بين العدالة الضريبية والإنفاق على التعليم
تابعونا على صفحتنا على الفايسبوك وتويتر https://www.facebook.com/ TaxesSimply Tweets by taxes_simply

[Image: “French class at the Sogman primary school in Sejnane” by World Bank Photo Collection is licensed under CC BY-NC-ND 2.0.]

Tax Justice Network’s French podcast: L’urgence d’une solution efficace pour les cryptoactifs #44

Welcome to our monthly podcast in French, Impôts et Justice Sociale with Idriss Linge of the Tax Justice Network. All our podcasts are unique productions in five different languages every month in English, Spanish, Arabic, French, Portuguese. They’re all available here and on most podcast apps. Here’s our latest episode:

Pour la 44ème édition de votre podcast en français sur la justice fiscale en Afrique et dans le monde produit par Tax Justice Network, nous revenons sur le Conférence Panafricaine sur les Flux Financiers Illicites. Avec notre expert permanent Jean Mballa, nous vous présentons les grandes lignes de cette activité. Aussi, nous abordons la question de l’application de la Norme Commune de Déclaration des actifs financiers, aux cryptoactifs. La question a fait l’objet de discussions il y a quelques mois dans le cadre d’une rencontre de l’OCDE. Andres Knobel l’expert propriété effective et propriété légale de Tax Justice Network y participait

Interviennent dans ce programme :

~ L’urgence d’une solution efficace pour les cryptoactifs #44

Vous pouvez suivre le Podcast sur:

[Image: “Binary code” by Christiaan Colen is licensed under CC BY-SA 2.0.]

Educação + impostos = vidas transformadas: the Tax Justice Network Portuguese podcast

Welcome to our monthly podcast in Portuguese, É da sua conta (‘it’s your business’) produced and hosted by Grazielle David and Daniela Stefano. All our podcasts are unique productions in five different languages – English, Spanish, Arabic, French, Portuguese. They’re all available here. Here’s the latest episode:

Educação + impostos = vidas transformadas #41

A crise global da educação foi tema da Cúpula da Educação Transformadora da ONU, que ocorreu em setembro de 2022. Enquanto o direito à educação continua sendo negado a milhares de crianças que estão fora da escola e para muitos adultos, que sequer foram alfabetizados,  pelo menos 20 milhões e 800 mil crianças a mais poderiam ir às aulas em 63 países de menor renda se os abusos fiscais forem coibidos, de acordo com estudo da Tax Justice Network, em parceria com Tax Ed Alliance. Um diagnóstico da educação pública no Brasil e em Angola,  a necessidade de ampliação nesses orçamentos e a possibilidade real de financiar o direito à educação pública e de qualidade se a justiça fiscal for aplicada estão na edição #41 do É da Sua Conta.

Você ouve no É da sua conta #41:

“Para ter uma condição minimamente digna, do ponto de vista econômico, profissionais trabalham  mais de 14 horas por dia, sendo que na educação isso tem um impacto muito grande para as condições físicas e psicológicas dos docentes e na aprendizagem dos estudantes. É necessário investimento, formação para os docentes e infraestrutura adequada.” ~Andréia Soares, diretora da Apeoesp

“Defendemos uma tributação progressiva, restrições no processo de endividamento de austeridade, inclusive com a sugestão de perdões de dívida, um aumento propriamente no volume de recursos, no aumento da razão imposto em relação ao PIB, mas também no aumento do valor por aluno.” ~ Andressa Pellanda, Campanha Nacional pelo Direito à educação

“Cerca de R$ 400 bilhões são investidos por ano em educação pública atualmente. Mas precisamos de cerca de R$ 800 bilhões, que é o que está na meta 20 do Plano Nacional de Educação”. ~ Daniel Cara, Campanha Nacional pelo Direito à Educação

“Nos perguntamos se orçamento do Estado pra educação é elaborado tendo em conta aquilo que Angola se comprometeu nos vários fóruns; com o Objetivo de Desenvolvimento Sustentável 4: uma educação inclusiva, equitativa e de qualidade, que proporciona oportunidades de aprendizagem ao longo da vida” ~ Vitor Barbosa, Rede-EPT

“Moçambique perde mais de US$ 315 milhões em receitas fiscais. Se 20% desse valor fosse destinado à educação, todas as crianças moçambicanas que estão fora do ensino fundamental e outras 66 mil do ensino médio poderiam frequentar a escola.” ~ Liz Nelson, Tax Justice Network

“Há dinheiro suficiente para financiar os Objetivos do Desenvolvimento Sustentável e garantir o direito à educação, mas não haverá, se continuarmos a permitir que países ricos facilitem fluxos financeiros ilícitos e abusos fiscais.” ~ Maria Ron Balsera, Tax Ed Alliance

Participam desse episódio

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Transcrição do episódio

[Imagem: “Children study in the public school” by World Bank Photo Collection is licensed under CC BY-NC-ND 2.0.]

~ Educação + impostos = vidas transformadas #41

Conecte-se com a gente!

É da sua conta é o podcast mensal em português da Tax Justice Network. Coordenação: Naomi Fowler. Produção: Daniela Stefano e Grazielle David.  Download gratuito. Reprodução livre para rádios.

Ordinary people shortchanged by Covid recovery measures in Global South

Across the Global South ordinary people – and women in particular – have been shortchanged by Covid recovery measures. A new analysis by the Financial Transparency Coalition (FTC), of which TJN is a member, shows that across 21 developing countries only 37 percent of Covid recovery funds were used for desperately-needed social protection measures, while 39 percent was distributed to large corporations.

The report also shows that, despite the rising needs, significantly less money was spent in 2021 when compared to 2020, and women received half as much funds as men. Almost no help was provided for informal workers, who make up a large proportion of the economy in many poorer nations. As the leaders charged with managing the global economy prepare to gather for the annual meetings of the World Bank and International Monetary Fund next month, the FTC and its members are calling for urgent progressive measures to reverse these unjust trends.

With the world in the grip of multiple enmeshed crises, the outlook is bleak for literally billions of people. If current trends in economic recovery policies continue, more than 85 percent of the world’s population will live in the grip of stringent austerity measures by next year. In total, between 75 to 95 million people are expected to be pushed into extreme poverty this year alone due to the Covid-19 pandemic and the cost-of-living crisis spurred by the Ukraine war. All the while, historic levels of inequality are rising further, according to the UN.

Matti Kohonen, director of the Financial Transparency Coalition, said: “Despite the cost-of-living crisis, governments in developing countries, often with their hands tied by international financial institutions, are putting big corporations ahead of the people. Nearly 40 percent of Covid-19 recovery funds went to big companies including loans and tax cuts, meaning that those most impacted by the pandemic, especially women and informal workers, have been left behind with inadequate social protection coverage.”

The report also found that: 

Meanwhile, pressure from international institutions such as the IMF to introduce austerity measures and cut funding for basic public services in return for debt restructuring is making things worse. For instance, in Zambia austerity cuts in public spending and rises in Value-Added Taxes (VAT) that hurt the poorest are being imposed as part of the IMF loan program.

At this critical juncture, there is a pressing need for the IMF and World Bank to implement alternative policies to bring a people-centered recovery instead of austerity. The measures these powerful institutions should be pushing for include taxing excess windfall corporate profits; introducing progressive levels of income and wealth taxes; eliminating illicit financial flows by implementing public beneficial ownership registries for all sectors and public country-by-country reporting, especially where there is a high risk of money laundering and tax abuses. They should also support the countries they work with to increase social security contributions and coverage.

To protect children’s right to education, governments must fight tax abuse

Every year millions of children are denied access to public education. Education is a child’s right, but government revenue budgets, especially in low income countries, are almost always insufficient to ensure all children have the opportunity to access publicly funded primary and secondary school.

In preparation for the United Nations Transforming Education Summit last week we prepared analysis on the impact of tax abuse on access to public education. The results were shocking. Of the $483 billion lost to tax abuse world wide over $30 billion is lost by the 27 low-income countries and 36 lower-middle-income countries for which data on government expenditure per school pupils is available. In these 63 countries there are 41 million children out of school. If each of these countries were to spend just 20 percent of the tax revenue they lose annually to global tax abuse, 20,800,000 children who don’t have access to education would get to attend primary school.

Our research with Dr. Bernadette O’Hare at the GRADE project used 2021 State of Tax Justice data to measure the impact of global tax abuse by multinational corporations and tax evasion by wealthy individuals on children left out of school. We specifically looked at the impact on education using data on ‘out of primary school’ children and ‘out of secondary school children’. The countries we analysed were: Samoa, Chad, Rwanda, Sierra Leone, Liberia, Malawi, Gambia, Cambodia, Mozambique, Madagascar, Uganda, Congo DRC, Kenya, Myanmar, Togo, Guinea-Bissau, Benin, Tanzania, Guinea, Afghanistan, Nepal, Ethiopia, Mali, Central African Republic, Burundi, Niger, Comoros, Burkina Faso, Georgia, Nicaragua, Vietnam, Sri Lanka, Egypt, Congo, Rep., Bhutan, Syria, Ukraine, India, Morocco, Timor-Leste, Zambia, Moldova, Cameroon, Armenia, Mongolia, El Salvador, Indonesia, Honduras, Vanuatu, Laos, Ghana, Senegal, Pakistan, Eswatini, Guatemala, Mauritania, Cote d’Ivoire, Paraguay, Guyana, Cape Verde, Sao Tome and Principe, Djibouti and Yemen.,

The Incheon Declaration (2015), adopted by 160 states, the World Bank, United Nations institutions and civil society presented a new vision for education and a commitment for governments to use between 15 to 20 percent of spending budgets on education. We cautiously assumed therefore that at most, governments would spend no more than 20 percent of any additional revenue found from curtailing global tax abuse on public education budgets.

At the United Nations Transforming Education Summit – the goal for the TaxEdAlliance, a global initiative that puts the spotlight on transforming education finance of which we are a member, was to urge a radical reframing in the way in which education is financed. Tax justice is central to this reframing.

The vision of Sustainable Development Goal 4 to ensure inclusive and equitable education continues to be thwarted by global tax abuse on a grand scale. Powerful actors whose interests lie in accumulating wealth are denying children throughout the world their right to education. As a consequence countries – economies and societies – that should prosper are out of pocket and without the means to provide inclusive and equitable public education.

It is shameful that those governments and financial institutions who have committed to Sustainable Development Goal 4 fail to make good on their commitments. It is shameful that the obligation to the right for each child to have education is deprioritised. More shameful is those governments and financial institutions who recklessly block progressive tax policy reforms.  The time to transform the financing of education is long overdue and calls for a fair, equitable and truly intergovernmental approach must be heard. Such reform demands political leadership. The May 2022 ministerial declaration of the Economic Commission for Africa saw more than a quarter of United Nations member states call for negotiations to begin on a UN tax convention that could deliver comprehensive progress. Yesterday, the UN Secretary General António Guterres announced his readiness to support a UN tax convention.

Policymakers must join this call urgently, and commit to a UN convention on tax that creates a globally inclusive, intergovernmental tax body to end the scourge of tax abuse.

Tax and racial justice: the Tax Justice Network podcast, the Taxcast

Welcome to the latest episode of the Tax Justice Network’s monthly podcast, the Taxcast. You can subscribe either by emailing naomi [at] taxjustice.net or find us on your podcast app.

In this episode, Taxcast host and producer Naomi Fowler explores tax as a tool for racial justice and the launch of a new report by Decolonising Economics.

Transcript of the show available here.

Links to past Taxcasts on reparational and tax justice, plus a video of the launch of new report: Tax as a Tool for Racial Justice and other useful resources available here.

There’s a real opportunity for mobilising towards transformative policies that’ll work not just for racialised communities in the UK and globally, but for everyone feeling the pains of this economic system”

~ Guppi Bola, Decolonising Economics

Featuring:

~ Tax and Racial Justice

You can watch the launch of the report Tax as a Tool For Racial Justice here:

Further reading:

Here’s a summary of this latest Taxcast episode:

Naomi: “On the Taxcast this month – racial injustice and how we end it. It’s not been central to tax and economic justice work and campaigning as it should have been. Especially in Europe. We’ve talked  on the Taxcast before about the 4 Rs of tax, that tax isn’t just about the most well known R – Revenue. Because as well as raising revenue, tax has other Rs that are less well known but they’ll start making more sense as we hear why tax is a crucial tool for racial justice.

So, here’s the other Rs of tax – there’s Repricing – that’s essential in a world experiencing climate crisis, needing to limit carbon use. The next R of tax is Redistribution – fair taxes, so wealth is shared better. Then there’s Representation – which is all about how tax justice enhances democracy and accountability.

We could add a fifth R – Repair. And that’s something that reparational justice campaigners talk about – that’s about remedying the legacy of social and economic exclusion and ecological damage caused by exploitation, colonialism, patriarchy and structural racism.

There are more Rs actually that we could add to the list, including Reorganisation and Reclaim, all about building a caring economy that gives space for care and compensates those who care – but that’s for another day, that’s another podcast!

So, a couple of years ago now the Tax Justice Network and our sister organisation Tax Justice UK collaborated with Decolonising Economics. It’s an organisation dedicated to building a solidarity economy rooted in racial justice principles. They’ve launched a new report “Tax As A Tool For Racial Justice” this month. Here’s some quick highlights for you from the launch itself from panellists we invited to discuss it. Let’s start with Assistant Professor of Africana Studies Keston Perry:”

Keston: “To some degree I’m a bit sceptical about the idea of how do we decolonise the tax system – what does that mean for around sort of reforming aspects of the tax system which are actually rooted in enslavement, rooted in colonial subjugation? For me i think the report is really critical as the first of its kind I’ve seen, that is very much an important start for conversations around how the British empire and its legacies as well as the continuation of the fragmentation of that empire, what it means for trying to instigate action towards racial justice, and for me i think it highlights the ways in which tax and the financial system in general has been used as a tool for racial subjugation, extraction, continuation of racial disparities and hierarchies.”

Naomi: “That was Keston Perry. And here’s Stephanie Brobbey of the Good Ancestor Movement:”

Stephanie: “I was really excited to see this movement-centred research and really feel that it’s a road map to racial wealth equity, about just how far tax should be used as a tool to repair structural inequities specifically in the context of racial justice and the racial wealth gap and really how to leverage tax as a tool for systemic change and not just in and of itself to fix, you know, short-term issues with the economy. You know, enslavement and colonisation literally built the wealth of nations and created the architecture of a financial system which naturally concentrates wealth in particular geographies and across specific demographics. We know that the Bank of England financed colonial expansion, that merchant banks provided commercial credit to expand colonial activity but also to finance the buying and selling of slaves. And so we have this creation of a financial system which favours whiteness by default.”

Naomi: “That was Stephanie Brobbey, one of our panellists at the launch of the report Tax as a Tool for Racial Justice. And finally, here’s economist in economic development Priya Lukka:”

Priya: “For a whole body of thinking of this kind to be finally in the public space and for us to all be able to reference it and for it to hold weight and strengthen our arguments is so significant and i think it’s really going to shape where we can go next from here. We know that people living in poverty are not beneficiaries of the tax system but they are instead net payers so groups who’ve had their power taken away from them by colonialism such as indigenous groups, afro-descendant people, people living in segregated urban areas and landless people all pay disproportionately more tax than they should so there are certain structural inequalities such as racial and gender inequality that are the legacy of colonialism and its mechanisms of which the tax system is one, as established by this report and that’s really fundamental for it to be firmly established and argued and evidenced. And the uk has played a role in shaping not just the global tax system that stripped wealth from former colonised countries, but the whole financial system. Thank you for producing this work and I’m sure it’s going to lead to dialogue and more hopefully disrupt the current system.”

Naomi: “That was Priya Lukka. You can watch the whole session, the link is in the show notes, and I’ll put the link to the report in there too. So, we’re all hoping that this report Tax As A Tool For Racial Justice and the bringing together of people from so many different spheres will move us all together into the same space to take the next steps when it comes to campaigning and research. I spoke with Guppi Bola of Decolonising Economics, author of the report:”

Guppi: “We really saw it as an opportunity to finally put into place a map, I guess, of where some of that uncovering of evidence, as well as design and creation or creativity around new ideas and policies around tax and tax justice could exist. And I think I had an idea in my mind about this map for quite a long time, and it really felt like tax was a very useful place to focus on within the broader financial system and our thinking about the various financial instruments, because I guess of how quickly things in the tax world change, how easy it might be to implement policies, but also how transformative applying different taxes can be to the power across the economy. Um, I also think that there is a perception that tax is quite boring…”

Naomi: “Never!!”

Guppi: “Ha, never! But it’s, yeah, for me, it’s just like another mechanism that can steer us towards where we want to go and so Decolonising Economics, I suppose maybe like every good initiative started out as a bit of a frustration about the way things were happening in, I suppose, what Noni my organising partner and I refer to as the mainstream economic justice movement or NGO sector. And we both came from community organising and activism, but also had professional lives within the sort of economic justice sector. There was a lack of depth in the analysis of what the root causes of inequalities were, largely stopping at the point of sort of 1930s neoliberal thinking and not going past that. And for us, there seemed to be a real evident connection between the history of the colonial era and the establishment of the capitalist economy and the inequalities that were in existence today, and kept getting worse over the last decade. And so our desire to sort of have that analysis in some of that work that we were doing in designing campaigns and thinking about what kind of projects we could do to do further research in this area, because as we sort of ran workshops and explored this and wrote articles, we realised that there was little evidence other than in quite dense academic texts and not enough that translated to strategy. But the other thing also driving us was an understanding of the fact that the economic system can change, it can transform, it could really work for addressing racial inequalities.”

Naomi: “Right, so you’ve written this report, tax as a tool for racial justice, and what you say about the lack of work and attention on this area when it comes to racial justice and all sorts of campaigning and activism on economic justice, there’s been such a, a gap there in the UK particularly if you compare with the United States. That’s also something that’s been happening in the tax profession itself, economists, the mainstream media and working as I do for NGOs I know that they’ve been really, really slow to put that into the centre of their work. Lack of diversity is a big part of it but it goes way, way beyond that, to the narratives, the dominant narratives in society and you know, you do tend to get different professions simply reflecting inequalities in the societies they operate in and not pushing beyond those boundaries. So, what I wanted to ask you really is, in a way you’ve answered it, but why this report now?”

Guppi: “The thing that I was really keen to do with this work is think about actually what tax justice and equity means in terms of accelerating a design of a financial system that actually works towards repair. So just like pushing the vision of what we’re trying to do rather than, well let’s just try and rebalance how much money goes into the financing of fossil fuel industries versus renewables, or, you know, rebalancing inheritance so that things are redistributed better, but really like pushing the boundaries of what we perceive as fitting within the tax system, which also includes, okay, well, how are we applying reparations in this context? And what, what does that mean? And what does it look like to both those who are residing in the UK, but also outside who are impacted by the actions of British colonies and colonial Britain. And I think that desire to, I guess, show something structured on paper as evidence that there is a way in which organisations can undertake bits of research and campaign design that doesn’t feel too, sometimes can feel really overwhelming and complex. And there’s layers and layers and layers of complexity still within the report, but at least it offers a bit of a framework to begin thinking about how you would structure different sectors within the economy, think about the types of questions you might ask around land or finance systems or inheritance and immigration, and how they intersect with racialisation and racial identities. And then also encourage people to think beyond just racism as a structural oppression but go beyond that to thinking about disability and trans and queerness and how those also intersect with this economy as well. So hopefully it’s an opening for something much broader that works both at the depth of transforming the economy through taxation but also other forms of financial instruments that are in operation as well.”

Naomi: “For those who are listening who don’t live in Britain, and even for those who do, can you talk a little bit about some of Britain’s racial inequalities that exist today?”

Guppi: “Britain’s an interesting place, because in my perspective, whilst a lot of the inequalities are quite overt and obvious, they are actually also quite hidden, so what is perceived as the norm actually has a hidden dynamic behind it that is not seen, so you don’t really think about laws around policing, the housing market, immigration system. There is a deep racialisation within each of those systems that has a perception of fairness and objectivity, but definitely because of the roots of a lot of those structures in the colonial logic play out in ways that perpetuate racial inequalities. We do know that, of course, over the last 10 years inequalities have got much worse. One of the best reports to read and I reference it in the paper is the Colour of Money by Runnymede Trust, which looks at the wealth levels across different racialised identities. And it shows that for every pound of white British wealth in white British households, British Indians have 90p comparatively, and those who are worst off are often, uh, gypsy Roma, traveller, Bangladeshi, Pakistani, and black Caribbean, and black African.”

Naomi: “Yes, apparently families of Bangladeshi and Black African heritage in the UK have ten times less wealth than White British families. The UK’s Department of Work and Pensions has found that 60 percent of Black and Asian households have no savings at all, compared to 33 percent of white households. I mean there are historical reasons that are playing out right to the present day, going back centuries going on here, it’s something Britain’s really struggling with, and we hope this conversation is becoming safer to have for people who’ve been trying for a long time to have this conversation about Britain and how its systems have perpetuated racial inequalities coming from a violent and oppressive history that has real live repercussions to this day in the country itself but also overseas of course in terms of former colonies, and the role it plays in debt and other extractive processes, not to mention climate crisis that’s such a large part of the experience of some of those nations. There are so many things to talk about but Britain just hasn’t dealt with its history even remotely yet, has it, never mind its present?”

Guppi: “No, not at all. And there was a British attitude survey from 2020, so it’s quite recent that said that still 60% of the British public feel that those countries that were colonised were left better off than if they weren’t. And I still find that astounding, I think the only other country in Europe that has a better, you know, positive perception of their empire is the Netherlands, but most other European countries publics are broadly ambivalent about their empire or colonial past. And I’m not entirely sure that that is much better, I think that is another example of a hidden history, so we are having to contend with a perception of positivity. I’m very grateful to be able to have this conversation freely, but for sure there will be and will continue to be a real struggle in trying to find space to have a political conversation around the colonial history of Britain and its impacts and its relationships today. And that of course began more publicly during the Black Lives Matter mobilising and..the involvement of academic historians who became spokespeople for that relationship. But I do think that it now is the time for NGOs and campaigning organisations to begin thinking about solutions that embody that analysis. Because we have a responsibility in the process of designing transformative policies and campaign ideas to find ways to unite groups and I think there’s a real opportunity for mobilising towards transformative policies that will work not just for racialised communities in the UK or globally, but for everyone who is feeling the pains of this economic system.”

Naomi: “Yeah, absolutely, the conversation is not free and open still in Britain. So, how would you describe this report?”

Guppi: “The report is sort of broken up into about four sections, I guess. And we begin with a glossary of terms, which we find useful to understand the information that you’re then going to read, to understand and situate the practices of British, colonial economic policies in today’s context of racial inequalities and make that relationship about how you know, in the 1600s when Britain began exploring, and I say exploring it wasn’t exploring was it?! Invading and capturing land! See, even I’m just like in that mindset over the way that we talk about it – capturing land and killing people, and how the design of different institutions like the Bank of England and insurance companies enabled that exploitation and extraction and how their existence today connects us to that globalised economy and the dynamics of that globalised economy, so a little bit of that history. And then we move into I guess the meat of it, which is where I talk about the different structures in which tax plays a role in both boosting wealth in whiteness, that there is a history of policies that maintain the strength of certain institutions that try to ensure wealth in whiteness, whether it’s in white households or white dominant institutions. And when I say whiteness, I don’t mean just like skin colour, I mean the concepts and ideas around the economic system. Or block wealth to black and people of colour communities. And so we look at things like immigration and land, housing and many other structures, and how those dynamics play a part. And then the final bit explores the idea of what tax could be. And so how to think more intelligently about tax as a tool.”

Naomi: “Yeah. Right, and next steps, what do you want them to be? I mean, for me, I would want racial justice to be key to all social and economic justice campaigning and activism and research. I’m looking for practical policy that can be implemented, things like slavery and empire audits in particularly finance institutions, we’ve seen some institutions going that route, we need to see more, what what’s next for you?”

Guppi: “Very similar to you, uh, Noni and I would just like some evidence, some numbers that we can use about how much wealth was extracted, you know, by certain institutions at certain times during the colonial era, how that has created their political power today and what influence those institutions have had on our modern economy and design of public policies today. I’m also really keen for some of the communities that we work with to have the space to actually dream and reimagine about reparations and tax and what that could look like and to feel ownership and agency around issues of tax so that they feel that they’re able to give ideas that then are seen as legitimate and possible by the mainstream campaigning organisations and can be inbuilt into a long term strategy. And when I’m talking long term, I’m talking like 20 years, even if we’re obviously battling with the kind of tax politics that we have at the moment with our current government. We need to be able to give some positive direction to where we can go. And if we’re not laying vision, we’re really just going in cycles of where the politics is taking us and not moving forward in our own imaginations. And, and for me, that feels really important at this point, because of just the sheer level of despair that everyone is feeling.”

Naomi: “Yeah. I mean we’re at a stage of what feels like a real turning point in Britain actually. There’s a transition going on of all different kinds in the UK. There’s a sort of isolationist thing going on, some of the former colonies are probably finally about to make the break from the monarchy, there’s some pretty toxic things going on with the government. If we talk about what campaigners and researchers should prioritise in terms of solutions, wealth taxes and inheritance taxes are really obvious, land value taxes, you know, financial transactions taxes, we’ve talked and thought a lot about a plan B for small island nations to diversify from oversized finance sectors that are really fuelling inequality there, as I’ve mentioned, you know, slavery and empire audits that lead to real meaningful reparational justice. You know, the tax justice network works a lot on trying to change who decides on global tax rules to take that power away from OECD former colonial nations and put us in the hands of the United Nations, we need debt relief, we need climate crisis reparations. And in fact, plundered nations are asking the United Nations right now for a global tax to pay for climate loss and damage. There’s so much to work on, tax professionals – we need you! Where would you prioritise?”

Guppi: “I do think that there is traction, high levels of traction for climate reparations dialogue. Just thinking about just the sheer impact that is so evident on you know 2-300 years of just being under control by an economic system that has prevented countries that have been formerly colonised from being able to protect its own citizens. It feels very evident that that should be a place in which we should put all our efforts, just given the sheer scale of how destructive that history has been and is gonna continue to be, so protections in those areas are important. The other thing I think, beyond the public campaigning and influencing and advocacy work is feeling part of an organising space that is actually able to apply positive forms of tax that do instill repair. There is an emerging group of individuals who are privileged from the perspective of inheriting wealth and who recognise that inheritance is problematic and that them inheriting that wealth maintains a particular economic structure that perpetuates inequalities, and so there’s a questioning around what to do with that wealth and how to redistribute it. And there’s also wealth advisors who are now advising out of investment in the stock market and finding ways to put wealth into community control. And I’m interested in philanthropic organisations who have control over their wealth to really think about where their endowments lay, where their investments are, what they’re making their money out of. And everyone in the sort of NGO sector is part of that system, you know, we receive grants from philanthropic bodies and are in a way through that mechanism of need participating in an extractive economic system that is basically creating the problems that we’re trying to solve. So where we have some relationship directly with institutions, I think that there is a role for us to play in advocating internally as well.

And some of the other things that I would prioritise is in the US there is a voluntary tax called the Shuumi land tax, which recognises existence on indigenous lands. And I’m interested in how we could think about what a voluntary tax in the UK could be that recognises how much the racialised communities have upheld the economic system in the UK, from the NHS to our care workers and cleaners, and that kind of hidden part of the economic system that basically holds us up, and how we could create a voluntary tax to reparate for that and help move people from a place of oppression and marginalisation towards feeling liberated. And I think just to end that in the eventuality of some form of collapse, we will need to begin developing that community infrastructure, not relying just on State infrastructure to be able to do that distribution. I think that that’s hard work, but I think it’s really, really important because some of the more resilient nations are those that have that kind of diversity of systems at play, and we definitely don’t have that so much here in the UK.”

Naomi: “No, we don’t, and it’s often presented in a kind of a binary – either the State takes control of everything or you leave it to the markets, and that is a real problem and paucity of vision that we have in Britain for sure. And I mean it does seem like we are in a kind of capitalist death spiral at the moment, you know, nothing must interfere with the God-given right to make as much money as possible, no matter who you hurt, no matter what the cost, no matter what the damage is to people, to the planet, to biodiversity. But transition is happening already in many nations, it’s happening in the UK, we’ve just had the hottest summer on record. Whether we like it or not, we are in a transition era of all types. You’ve talked a bit about reimagining the commons and thinking differently about the nature of ownership and stewardship actually so that humanity can be compatible with the natural world instead of destroying everything that our lives actually depend on. So, it’s about visionary thinking because without it, it feels like we are really doomed!”

Guppi: “Well, you know, I had in the last 15 years of doing economic justice work to really dig deeper into the existence of other forms of economic practices, which is ultimately, you know, our relationship and management of resources and pulling in wisdoms of indigenous communities that are deeply connected with nature and nature’s resources, and communities as beings as kind of interdependence that we have with one another. And I do think that it is very challenging to look at politics today or look at people’s day to day and try to apply those practices, and imagine that those practices could be policy, but I do believe that it’s possible and I keep going back to this concept of community self-determination and organising.”

Naomi: “You’ve been listening to Guppi Bola of Decolonising Economics. And I’ll leave you with a pretty brutal example of how markets are perpetuating injustices, and profiting off misery. It’s not hard to see that it’s immoral. But also that it’s a continuation of a long history of subjugation, and that we can’t go on like this. After covid struck not so long ago, Zambia defaulted on its sovereign debt. Zambia’s been asking its creditors, including asset managers BlackRock to restructure the debt repayments they owe them. Even by IMF measures Zambia’s debt’s not sustainable. Here’s Stephanie Brobbey of the Good Ancestor Movement:”

Stephanie: “Blackrock holds about 220 million dollars worth of Zambian sovereign bonds and stands to generate in excess of 180 million dollars for its clients if those debts are paid in full, and Zambia has incurred crippling debt in order to try and build its infrastructure to protect its people from the climate emergency. And this is a classic example of how debt is preventing lower income, typically black and global majority countries from protecting themselves against the worst effects of climate change and this is a kind of double injustice the original extraction from colonial activity and enslavement, to kind of suffering from the emissions that have been caused by countries in the global North who are then continuing to extract from them and to amass wealth through their misfortunes and they are refusing to suspend interest payments, so that demonstrates the harm that is inflicted on black and global majority communities in this way which is rewarded in monetary terms. It really taps into the psyche of actually what we’re dealing with, wealth has been, and continues to be divided along racial lines.”

Naomi: “Stephanie Brobbey there. I’d add that Blackrock has clashed over the years with various tax authorities over its tax contributions, including in the UK. There’s so much reform and rethinking to be done. And all our lives depend on it.”

Glencore and Sinosteel cases in Cameroon: Practical cases of the need for more transparency on extractive contracts in Africa

A mining contract signed by the Government of Cameroon with Sinosteel, a Chinese multinational, for an iron ore project was the centre of controversy in May 2022. Parliamentarians and some activists denounced the contract and demanded its cancellation because the agreement was disadvantageous for Cameroon. In an interview with BBC Africa, the Cameroonian mining minister swept aside all concerns, and the government decided to publish the contract online. 

In the same month, Glencore, the Anglo-Swiss multinational that dominates commodities trading, admitted to paying USD $79.6 million through front companies to obtain advantageous oil and gas contracts, including in Cameroon.  

These are reminders that people need to know more about the agreements that give foreign companies the right to exploit and trade resources belonging to their countries. State coffers and therefore citizens, always lose out because of hidden deals, weak laws and aggressive corporate tax practices. In most jurisdictions, non-renewable mineral resources are managed by the state on behalf of the people. States typically grant companies the right to explore, extract and often sell mineral resources in exchange for revenue or a share of production. Contracts describes the rights, duties and obligations of both companies and the state, including the fiscal regime. These contracts can span decades and have significant and lasting impacts. 

Extractive contracts: why transparency matters 

Contract transparency in the extractive industries is essential for fighting against illicit financial flows. In its 2022 Progress Report, the global Extractive Industries Transparency Initiative (EITI) stated: “By shedding light on the rules and terms that govern extractive projects, contract transparency can help fight corruption and empower citizens to assess whether they are getting a fair deal for their resources. This information can be crucial in contexts where valuable revenues are impacted by market volatility and emerging energy transition policies”.  

Contract disclosure means that officials and companies will be subject to increased scrutiny. This can deter contacts with weak or poor fiscal terms. It also allows governments to compare the quality of contracts with other jurisdictions. Disclosure allows government agencies other than the agencies that formally enter the contract, and civil society, to monitor contract compliance. 

Opacity increases the risk of revenue loss. In a report published in 2021, the International Monetary Fund shows how the budgets of sub-Saharan African countries have been severely constrained by efforts to manage the Covid-19 pandemic, while tax avoidance by multinational extractive companies is costing them up to $750 million a year. 

In 2021, the Tax Justice Network, Public Service International and Global Alliance for Tax Justice’s State of Tax Justice report found that Africa had lost USD $17.1 billion, mostly to multinational tax abuse. For the region, this represented the equivalent of a third of public health budgets in the midst of the Covid-19 pandemic.  

Disclosure of extractive contracts: global and African trends in the Financial Secrecy Index 2022 

In the Tax Justice Network’s Financial Secrecy Index 2022, jurisdictions are assessed for contract transparency. Secrecy Indicator 9 examines whether domestic laws provide for online access to mining and petroleum contracts signed between governments and extractive companies. 

To verify this, the index examines several levels of transparency in mining and petroleum contracts. Perhaps the most important aspect is whether a jurisdiction has adopted a law that requires the publication of all extractive contracts without exception. Yet policy is only as good as practice. The analysis reviews whether contracts are actually published. Countries are given scores depending on the level of disclosure in practice, ranging from all/most contracts being made public and accessible, to no contracts being disclosed online. For the collection and analysis of information, the Financial Secrecy Index uses the most recent update of the Natural Resources Governance Index (oil and gas) contract disclosure tracker, maintained by the Natural Resources Governance Institute.  

Of the 141 countries analysed by the Financial Secrecy Index 2022, 29 are considered mining countries and 47 are oil producing countries. Of the mining, only 9 have adopted laws that mandate the disclosure of mining contracts, three of which are in Africa (Cameroon, Liberia and Tanzania). With regard to oil contracts, 12 countries, including 4 in Africa (Ghana, Cameroon, Tanzania and Liberia), have laws requiring contract disclosure. 

Fewer countries actually publish contracts in practice. Of the 29 mining countries, only 4 publish all of their contracts, 7 do so partially, 17 do not do so at all and for 1 country this information has not been cross-checked. In petroleum, 12 countries publish contracts, 6 publish only some contracts, and 27 do not publish at all (2 countries could not be confirmed). 

Transparency of oil and mining contracts around the world.
Transparency of oil and mining contracts around the world.
Source: Financial Secrecy Index 2022

In Africa, of the 18 countries in the region assessed by the Financial Secrecy Index, 9 have oil, and only 2 (Ghana and Tunisia) publish all their oil contracts. Liberia publishes some contracts and countries like Nigeria, Angola, and Algeria, which are the three largest oil producers in the region, do not publish contacts at all. In the mineral resources sector, no country fully publishes its contracts. Two countries, notably Liberia and Tunisia, publish some contracts and seven African mining countries do not publish any contracts.  

Based on this analysis, it can be concluded that Liberia is an example of good practice in Africa in terms of disclosure of extractive resource contracts. Even if it only publishes some of its contracts, the authorities have passed laws that require the publication of mining and oil contracts. Tunisia does not have specific laws for disclosure but it publishes its extractive contracts. While Ghana is a historical gold producer in Africa and has no contract disclosure for mining, it has recently passed a law that provides for publishing oil contracts. 

Cameroon has made progress, but needs to catch up with best practice 

For Cameroon, the Financial Secrecy Index 2022 shows that the law favours the publication of extractive contracts. Indeed, according to Article 6 of Law 2018/011 on transparency and good governance in the management of public finances, “Contracts between the administration and public or private companies, particularly companies exploiting natural resources and companies operating public service concessions, shall be clear and made public. These principles apply both to the procedure for awarding the contract and to its content”. 

Despite the existence of this law, Cameroon has not been rated highly on the publication of contracts by the Financial Secrecy Index 2022. At the time the index was published, and despite exchanges with the Cameroonian authorities, no evidence was provided that the country is publishing its oil and mining contracts. In its new National Development Strategy, the authorities have placed the extractive sector (gas and solid minerals) as a lever for its development in the second part of its Vision 2035. There is also no publicly accessible platform where the different licenses/contracts on extractive operations can be found.  

Following pressure from the public after the initiative of a parliamentarian, the Ministry responsible for mining decided to publish the mining contractof iron ore with the Chinese state group Sinosteel. An analysis of this contract reveals that some of its provisions are contrary to the spirit of the law on transparency and good governance in Cameroon, and it also falls short of the transparency standards promoted by the Tax Justice Network, Tax Justice Network-Africa, the Natural Resources Governance Institute, the global Publish What You Pay coalition, as well as other civil society actors who advocate for greater transparency in the sector. Article 27 of this document states that certain information on the execution of the mining contract is confidential and cannot be made public. Further, article 44 provides for the possibility of negotiating special agreements, which are not integrated into the main contract and are not made public. These provisions are likely to favour the company, to the detriment of the interests of the Cameroonian people and the populations living near the mine. Secret negotiations could also negatively affect the government’s ability to generate consistent revenue from the exploitation of the resource. 

Transparency in headquarter jurisdictions 

The issue of transparency of extractive contracts is key to reducing tax abuse in Africa and all developing countries. Many jurisdictions are not necessarily endowed with natural resources, but are home to multinational companies active in the sector. These include European Union countries as a whole, and countries such as Switzerland. France and Italy, for example, are home to several of the world’s leading energy companies, including Total, Areva, and ENI, which have mining and hydrocarbon operations in Africa. The European Parliament and Council adopted the directive on accounting and transparency in 2013, which obliges mining, oil and gas companies and logging companies above a defined size to report their payments to the respective governments of the countries where they operate. All 27 Member States have transposed this directive into their national laws.  

On 19 June 2020, the Swiss Parliament revised its Code of Obligations relating to company rights and new provisions require Swiss extractive companies active in oil, gas and minerals to disclose payments they make to governments around the world. This law is aligned with the extractive industries rules already in place in Canada, the European Union, Norway and the United Kingdom. The law applies to companies’ extractive activity for payments above 100,000 Swiss francs per year and runs from 1 January 2021. 

While important, these advances represent only a small part of the need for full transparency in extractive contracts. Mining and oil companies are also cited as supporting at the Extractive Industries Transparency Initiative. The International Council of Mining and Metals Companies has also indicated that all of its members are in favour of greater transparency in extractive contracts, and are aligned with the implementation of the EITI principle  . 

Transparency is necessary, but not sufficient 

Yet advances remain limited where the objective is to fundamentally reduce abuse in the extractive industries. The EITI standard on contract transparency, for example, only applies to contracts signed after 1 January 2021. In Africa, the bulk of contracts are more than 30 years old. And as the Financial Secrecy Index shows, while many countries adopt laws for contract disclosure, in practice, many countries do not publish at all, or only some contracts. Further, once contracts are published, other essential elements such as updates on beneficial owners, contract annexes, environmental management, project financing, and subcontracts are not made public. 

The Africa Mining Vision, which has been adopted by all African countries, also places an emphasis on transparency across the mineral value chain, alongside deep economic structural changes to ensure resources work for the people. In particular, the Africa Mining Vision states that laws should allow for a clear understanding of the people behind multinational extractive companies and their projects. Contracts must also be approved by parliamentarians. 

Further, to promote fiscal transparency in the extractive sector and tackle illicit financial flows: 

Affaires Glencore et Sinosteel au Cameroun: Cas pratiques du besoin de plus de transparence sur les contrats extractifs en Afrique

Durant le mois de mai 2022, le Cameroun a connu une polémique à propos d’une convention d’exploitation de fer signée entre son gouvernement et Sinosteel, une multinationale chinoise. Des députés rejoints par une partie de la société civile ont dénoncé ce contrat et exigé son annulation, expliquant que cet accord était désavantageux pour le pays. Dans une interview accordée le 23 mai 2022 à la chaîne de radio BBC Afrique, le ministre camerounais en charge des mines a démenti l’ensemble des craintes soulevées par l’opinion publique. Le gouvernement par la suite a décidé de publier ladite convention sur le site officiel du Ministère des Mines de l’Industrie et du Développement Technologique.  

Sur un tout autre plan, Glencore, la multinationale anglo-suisse qui domine dans le secteur du trading des matières premières, a reconnu parmi plusieurs autres infractions, avoir effectué des paiements de l’ordre de 79,6 millions $, via des sociétés écrans, pour obtenir des contrats avantageux dans les secteurs du pétrole et du gaz, y compris au Cameroun.  

Cette polémique ainsi que le cas de corruption de Glencore au Cameroun, rappelle qu’il existe un besoin des populations d’en savoir davantage sur les conventions qui donnent le droit à des entreprises étrangères d’exploiter et d’effectuer des transactions sur des ressources appartenant à leurs pays. Les caisses de l’État et donc, les citoyens, sont toujours perdants en raison d’accords cachés, de lois peu rigoureuses et de pratiques fiscales agressives des entreprises. Dans la plupart des juridictions, les ressources minérales non renouvelables sont gérées par l’État au nom du peuple. Les États accordent généralement aux sociétés le droit d’explorer, d’extraire et souvent de vendre des ressources minérales en échange de revenus ou d’une part du minerai. Le contrat décrit les droits, devoirs et obligations des parties, y compris les conditions et dispositions fiscales. Ces contrats peuvent s’étendre sur des décennies et entraîner des répercussions importantes et durables. 

Contrats extractifs : Pourquoi la transparence compte 

La transparence des contrats dans le secteur extractif est un élément essentiel de la lutte contre les flux financiers illicites. Dans son rapport de suivi pour l’année 2022, l’Initiative qui est le fruit d’une volonté globale pour la Transparence dans les Industries Extractives (ITIE) a rappelé l’importance de la transparence pour les contrats extractifs. « En faisant la lumière sur les règles et les termes qui régissent les projets extractifs, la transparence des contrats peut aider à lutter contre la corruption et donne aux citoyens les moyens d’évaluer si les recettes obtenues pour leurs ressources sont justes. Ces informations peuvent être cruciales dans des contextes où de précieuses recettes sont impactées par la volatilité des marchés et les politiques émergentes de transition énergétique », peut-on y lire. 

Il est généralement admis que la divulgation des contrats extractifs implique que les fonctionnaires et les entreprises feront l’objet d’une surveillance accrue. Cela peut dissuader d’introduire des conditions fiscales faibles ou médiocres. Cela permet aussi de comparer les gouvernements quant à la qualité de leurs négociations avec les entreprises. Finalement, la divulgation permet aux agences gouvernementales autres que le responsable signataire, et à la société civile de surveiller l’exécution des contrats. 

L’opacité sur le cadre dans lequel les ressources sont exploitées constitue en effet un risque de perte de revenus. Dans un rapport qu’il a publié en 2021, le Fonds Monétaire International montre comment les budgets des pays d’Afrique Subsaharienne ont subi de fortes contraintes en raison des efforts fournis pour gérer la Covid-19, alors que l’évitement fiscal des multinationales extractives leur fait perdre des sommes allant jusqu’à 750 millions $ par an. 

En 2021, le rapport sur l’Etat de la Justice Fiscale publié par Tax Justice Network a mis en évidence le fait que l’Afrique avait perdu 17,1 milliards $ du fait majoritairement des abus fiscaux des multinationales. Pour la région, cela représentait en pleine crise de Covid-19, l’équivalent d’un tiers des budgets de la santé publique. Ainsi les pertes de revenus pour les pays Africains sont les plus importantes en proportion des ressources dont ils ont besoin pour financer leurs objectifs de développement.  

Publication des contrats extractif : Tendances dans le monde et en Afrique selon l’Indice d’Opacité Financière 

Dans son édition la plus récente publié le 17 mai 2022, l’Indice d’Opacité Financière produite par les experts de Tax Justice Network met une fois de plus un accent sur la nécessité de transparence en matière de contrats extractifs. L’indicateur clé N°9 qui est exploité dans cet outil, évalue si les lois d’un pays permettent aux citoyens et à toutes les parties intéressées, d’accéder aux conventions signées entre les Etats et les sociétés extractives, et prendre librement et totalement connaissance de leurs contenus 

Pour vérifier cela, l’indice examine plusieurs niveaux de transparence sur les contrats pétroliers et miniers. L’aspect sans doute le plus important est celui de savoir si une juridiction a adopté une loi qui impose la publication sans exception de tous les contrats extractifs. Le deuxième aspect de l’analyse concerne la publication effective de ces contrats. Selon qu’ils sont totalement rendus publics et accessibles ou publiés en partie et dans certains cas avec un accès limité ou complexe, un pays recevra une note spécifique. Pour la collecte et l’analyse des informations, l’équipe qui travaille sur l’Indice d’Opacité Financière au sein de Tax Justice Network sert de la mise à jour la plus récente de l’indice de gouvernance des ressources naturelles (pétrole et gaz), qui est produite par l’ONG Natural Ressources Gouvernance Institute (NRGI), et est librement accessible  

Parmi les 141 pays analysés par l’Indice d’Opacité Financière, 29 pays sont considérés comme étant des pays miniers et ce nombre atteint 47 pour ce qui est des pays qui produisent le pétrole. Sur les pays concernés par l’exploitation minière, seulement 9 ont adopté des lois qui prescrivent et rendent obligatoire la divulgation des contrats miniers, dont trois en Afrique (Cameroun, Libéria et la Tanzanie). En matière de contrats pétroliers 12 pays dont 4 africains (Ghana, Cameroun, Tanzanie et Libéria) ont des lois qui prescrivent la publication des contrats entre le gouvernement et les multinationales pétrolières. 

Cette tendance n’est pas très différente pour ce qui est de la publication effective des dits contrats. Sur les 29 pays analysés qui possèdent des ressources minières, seulement 4 publient la totalité de leurs contrats, 7 le font partiellement, 17 ne le font pas du tout et pour 1 pays cette information n’a pas été recoupée. En matière pétrolière, le nombre des pays qui publient les contrats dans la pratique est de 12, et ceux qui le font partiellement sont au nombre de 6 et enfin, 27 ne le font pas du tout (Pour 2 des pays analysés les informations n’ont pas pu être confirmées). 

Transparence des contrats pétroliers et miniers selon les lois et en pratique dans le Monde
Transparence des contrats pétroliers et miniers selon les lois et en pratique dans le Monde
Source: Financial Secrecy Index 2022

En Afrique, les tendances ne sont pas très différentes. Sur les 18 pays de la région évalués dans le cadre de l’Indice d’Opacité Financière, 9 possèdent du pétrole, et seulement 2 (Ghana et Tunisie), publient la totalité de leurs contrats pétroliers. Le Libéria publie partiellement et des pays comme le Nigéria, l’Angola, et l’Algérie qui sont les trois plus grands producteurs de pétrole de la région, ne publient rien du tout. Dans le secteur des ressources minières, aucun pays ne publie totalement ses contrats. 2 pays, notamment le Libéria et la Tunisie en publient une partie et 7 pays miniers africains ne produisent aucun contrat.  

Sur la base de cette analyse, on peut déduire que le Libéria est un exemple de bonnes pratiques en Afrique, pour ce qui est de la divulgation des contrats sur les ressources extractives. Même s’il ne publie que partiellement ses contrats, les autorités y ont adopté des lois qui imposent la publication des contrats miniers et pétroliers.  La Tunisie et le Ghana auraient aussi pu être des exemples de bonnes pratiques. Mais le premier ne dispose pas de loi précise en la matière, même s’il publie ses contrats extractifs. Le deuxième est producteur historique d’or en Afrique mais ne possède pas de loi sur la divulgation des contrats dans ce secteur, bien qu’il ait récemment adopté une loi qui prévoit la publication des contrats pétroliers. 

Le Cameroun a progressé, mais il doit se hisser au niveau des meilleures pratiques 

Dans le cas du Cameroun, il ressort de l’évaluation faite par l’indice d’opacité financière 2022, qu’il existe une loi qui favorise la publication des contrats extractifs. En effet, selon l’article 6 de la loi 2018/011 du 11 juillet 2018 portant transparence et bonne gouvernance dans la gestion des finances publiques, « Les contrats entre l’administrations et les entreprises publiques ou privées, notamment les entreprises d’exploitation des ressources naturelles et les entreprises exploitant des concessions de services publics sont clairs et rendus publics. Ces principes valent tant pour la procédure d’attribution du contrat, que pour son contenu » 

Malgré l’existence de cette loi, le Cameroun n’a pas été bien noté dans la publication des contrats. Au moment où l’indice d’opacité financière 2022 était publié et malgré des échanges avec les autorités camerounaises, il n’a été démontré nulle part que le pays publiait ses contrats pétroliers et miniers. Dans sa nouvelle Stratégie Nationale de Développement, les autorités ont pourtant placé le secteur extractif (Gaz et Mines solides), comme un levier de son développement, pour la deuxième partie de sa Vision 2035. Il n’existe aucune plateforme librement accessible au public, où on retrouve les différents titres d’attribution des exploitations extractives.  

A la suite de la pression de l’opinion publique après l’initiative d’un membre du parlement, le ministère en charge des mines a décidé de publier la convention d’exploitation de minerai de fer avec le groupe étatique chinois Sinosteel. L’analyse de cette convention révèle que certaines de ses dispositions sont contraires à l’esprit de la loi sur la transparence et la bonne gouvernance au Cameroun, mais aussi en dessous des standards de transparence qui sont fixé par Tax Justice Network, Tax Justice Network Africa, Natural Resources Governance Institute (NRGI), la coalition mondiale Publiez Ce Que Vous Payez, ainsi que d’autres acteurs e la société civile qui plaident pour une plus grande transparence dans le secteur. A l’article 27 de ce document, il ressort que certaines informations sur l’exécution du contrat minier sont frappées de confidentialités et ne peuvent être rendue public. L’article 44 donne la possibilité que soient négociés des accords spéciaux, qui ne sont pas intégrés dans la Convention et qui ne sont pas rendus public. Ces dispositions sont de nature, à favoriser que des avantages soient accordés au partenaire, à la défaveur des intérêts du peuple camerounais et des populations riveraines du site d’exploitation de la ressource. Aussi, des négociations secrètes pourraient négativement affecter la capacité du gouvernement à générer des revenus consistant sur l’exploitation de la ressource. 

La transparence sur les contrats extractifs s’applique en partie 

La question de la transparence des contrats extractifs est un élément essentiel de l’objectif visant à réduire les abus fiscaux en Afrique et dans tous les pays en voie de développement. De nombreuses juridictions ne sont pas forcément dotés de ressources naturelles, mais sont le lieu d’incorporation de multinationales actives dans le secteur. On peut citer ainsi l’Union Européenne dans son ensemble, ou encore des pays comme la Suisse. La France et l’Italie par exemple, sont les sièges de plusieurs importantes sociétés énergétiques dans le monde à savoir les groupe Total, Areva, ou encore ENI, qui ont des opérations dans le secteur des mines et des hydrocarbures en Afrique. Ainsi, le Parlement et le Conseil européens ont adopté la directive sur la comptabilité et la transparence en 2013, qui contraint les entreprises minières, pétrolières et gazières et les sociétés d’exploitation forestière dépassant une taille définie à déclarer leurs paiements aux gouvernements respectifs des pays où ils sont actifs. Les 27 États membres ont transposé cette directive dans leurs lois internes.  

Le 19 juin 2020, le Parlement suisse a révisé son Code des Obligations relatif aux droits des sociétés et de nouvelles dispositions imposent aux entreprises extractives suisses actives dans le domaine du pétrole, du gaz et des minéraux de divulguer les paiements qu’elles effectuent aux gouvernements du monde entier. Cette loi est alignée sur les règles relatives aux industries extractives déjà en place au Canada, dans l’Union Européenne, en Norvège et au Royaume-Uni. Elle s’applique à l’activité des entreprises extractives pour des paiements effectués au-delà de 100 000 francs suisses par an et est en vigueur depuis le 1er janvier 2021. 

Bien qu’importantes, ces avancées ne représentent qu’une petite partie des besoins de pleine transparence dans les contrats extractifs. Les entreprises minières et pétrolières sont aussi citées comme apportant leurs soutiens à l’Initiative Pour la Transparence dans les Industries Extractives. Le Conseil International des entreprises du secteur de la Métallurgie et des Mines a aussi fait savoir que l’ensemble de ses membres sont favorables à une plus grande transparence dans les contrats extractifs, et ils s’alignent pour cela sur la mise en pratique du principe de l’ITIE allant dans ce sens. 

La transparence est nécessaire, mais elle n’est pas suffisante 

Ces avancées demeurent toutefois limitées face à l’objectif de réduire les abus fiscaux dans les industries extractives. Déjà le standard de l’ITIE, ne concernera que les contrats qui ont été signés après le 1er janvier 2021. En Afrique, l’essentiel des contrats d’exploitation datent parfois d’il y a plus de 30 ans. Comme on a pu le voir avec l’indice d’opacité financière, de nombreux pays s’engagent en adoptant des lois favorables à la publication des contrats extractifs. Mais dans la pratique ils sont nombreux à ne rien publier du tout, ou à ne publier que partiellement les contrats concernés. On constate aussi, qu’une fois les contrats publiés, les autres éléments essentiels comme les mises à jour sur les bénéficiaires effectifs, les annexes aux contrats, la gestion environnementale, le financement de l’exploitation du projet, la gestion de la sous-traitance et d’autres informations ne sont pas toujours rendus publiques. 

La Vision Minière Africaine qui a été adoptée par l’ensemble des pays du continent met elle aussi un accent sur la transparence dans le secteur extractif, parallèlement à un besoin de changements structurels économiques profonds, pour faire en sorte que les ressources servent les intérêts des populations. La Vision prescrit notamment, que les lois doivent autoriser de bien connaître les personnes derrière les multinationales extractives ainsi que leurs projets. Les conventions doivent aussi faire l’objet de validation par les parlements.  

Ainsi, pour promouvoir la transparence fiscale et lutter contre les flux financiers illicites dans le secteur extractif: 

Tax as a tool for racial justice: new report launched

The etymology of tax is “to fix”, and so…we ask ourselves “how
can tax help address racial wealth inequality [and] repair the harms of structural racism that are embedded into our economic system?”

~ Decolonising Economics, Tax as a Tool for Racial Justice report

These are crucial questions. And it’s taken many of us involved in movements to tackle the world’s inequalities far too long to engage with them.

In partnership with our sister organisation Tax Justice UK, we at the Tax Justice Network collaborated with Guppi Bola of Decolonising Economics who has written a report which is the first of its kind in the UK: “Tax as a Tool for Racial Justice”. Decolonising Economics works to build a solidarity economy rooted in racial justice principles and you can read more about the organisation and its work here.

As it begins, the report “is intended to be a framework for future research, organising and campaigns for racial justice.”

To discuss the report, first presented by Guppi Bola, and next steps for campaigners and researchers, we brought together a panel of experts: Keston K. Perry Assistant Professor of Africana Studies, Williams College, Stephanie Brobbey Founder and CEO of the Good Ancestor Movement and Priya Lukka Economist in International Development. You can watch the launch of the report here:

You can also listen to Guppi Bola of Decolonising Economics speaking with Naomi Fowler on the Tax Justice Network podcast the Taxcast in more depth about the report here:

~ Tax and Racial Justice, Taxcast, September 2022

While in Britain there’s a big knowledge and research gap (as is unfortunately the case in many countries), in the United States there’s been some great work on tax histories and tax justice principles as they apply to racial justice, notably the work of the excellent Center on Budget and Policy Priorities and Professor Dorothy Brown’s The Whiteness of Wealth: how the US tax system impoverishes black Americans – and how we can fix it’, plus so much more.

You can hear Professor Brown’s keynote speech here at the Tax Justice Network 2021 conference. You can also hear her in conversation on our podcast the Taxcast, where she explains how the doors weren’t open to her work in this area: “Let’s be clear – when I started writing about race and tax, I was not – my scholarship nor I were welcomed by the white male law professor tax gatekeepers.”

Here’s a great twitter thread from Brakeyshia R. Samms listing US research:

Below is a list of resources which may also be of interest, some of which were shared during the launch. Please do add your suggestions in the comments section, we’ll be happy to have them.

Firstly we’re sharing links to the Taxcast, some of our monthly podcast editions which explore this area. All previous episodes are available here. (You can also find podcasts on that site in Spanish – Justicia ImPositiva, French – Impôts et Justice Sociale, Portuguese – É Da Sua Conta, and Arabic – الجباية ببساطة)

September 2022 Spanish language tax justice podcast, Justicia ImPositiva: La constitución Chilena, Crimen Organizado, el nuevo contexto global de EE UU

Welcome to our Spanish language podcast and radio programme Justicia ImPositiva with Marcelo Justo and Marta Nuñez, free to download and broadcast on radio networks across Latin America and Spain. ¡Bienvenidos y bienvenidas a nuestro podcast y programa radiofónico! Escuche por su app de podcast favorita.

En este programa con Marcelo Justo and Marta Nuñez:

INVITADOS

~ La constitución Chilena, Crimen Organizado, el nuevo contexto global de EE UU

MÁS INFORMACIÓN:

Imagen: “Ley Rechazada (en teoria)” by gritoAcrata is licensed under CC BY-NC-ND 2.0.

Tax haven Ireland to face UN spotlight over child rights impacts of fiscal policies

Ireland’s long-running battle with the European Union over Apple’s unpaid taxes has more than demonstrated the country’s dogged determination to continue facilitating massive levels of corporate tax avoidance. Pressure for reform in the ‘land of 100,000 welcomes’ is building, however. Next month in Geneva, Ireland’s tax policies will once again come under the spotlight when the United Nations Committee on the Rights of the Child considers evidence from civil society organisations. The meeting comes ahead of Ireland’s appearance before the Committee in early 2023, at which its compliance with the Convention on the Rights of the Child will be formally interrogated by a panel of UN experts.

The Committee has already set its sights on the human rights impacts of Ireland’s fiscal regime, particularly as they pertain to lower income countries, having raised the issue in November 2020. A coalition of Irish and Ghanaian organisations fighting for tax justice has now made a follow-up submission to the Committee setting out in detail the manifold ways Ireland siphons revenue away from poorer countries and the devastating human rights impacts this incurs.

Perhaps the best-known aspect of Ireland’s role in international tax abuse is its facilitation of profit shifting by multinational corporations. As the submission demonstrates, the legal structures offered by the country in order to enable such practices have evolved over time, but progress in putting an end to profit shifting has remained meagre at best. The government has used superficial reforms to argue it has closed loopholes, but the notorious ‘Double Irish’ tax avoidance structure has simply given way to the ‘Single Malt’ which allows companies to achieve the same result through alternative channels.

Ireland’s extensive network of 73 bilateral tax treaties, in combination with these ignominious fiscal structures, make it a prime destination for companies seeking to shift their profits out of other countries and thereby avoid paying their fair share of tax. What’s more, the country has been specifically targeting emerging African economies for such agreements in recent years, despite serious concerns that its aggressive negotiating tactics have led to deleterious outcomes for partners such as Ghana. Indeed, research carried out by the Government Revenue and Development Estimations (GRADE) initiative at St Andrew’s University shows that revenue lost to corporate profit shifting from the West African country in a single year would otherwise have saved the lives of 170 children. The Tax Justice Network’s State of Tax Justice report meanwhile estimates that Ghana loses US $166 million a year – the equivalent of 19% of its health budget – to cross-border tax abuse. In total, Ireland imposes revenue losses of some US $19 billion a year on other countries, according to our calculations.

When challenged about the nefarious impacts of its tax havenry, Ireland’s government has generally pointed to a 2015 spillover analysis commissioned by its Department of Finance which, the country argues, shows it has no negative impact on developing countries. Said analysis is seriously flawed however; it only examined 13 of the developing countries which receive investment flows from Ireland, and only 4 percent of the available data on Irish overseas investment.

Moreover, Ireland’s role in undermining human right in other countries is not limited to its direct facilitation of international tax abuse. Like all states that have signed up to the major UN human rights agreements, it is also subject to extraterritorial obligations to respect, protect and fulfil human rights through its participation in institutions of international governance.

These principles appear to have been ignored when Ireland fought hard to water down proposals at the OECD for a global minimum corporate tax rate, and thereby helped ensure the final agreement – ostensibly intended to end the ‘race to the bottom’ in corporate taxation – would bring little or no benefit for poorer nations.

Similarly, the country continues to resolutely oppose proposals for international tax talks to be moved from the OECD to the UN, and for the creation of a new global tax convention under the auspices of the same body. Both of these measures represent long-standing demands of civil society organisations and governments across the Global South, as lower income countries could participate on a more equal footing at the United Nations.

Having always valued its reputation as a champion of human rights and solidarity on the international stage, Ireland needs to deliver a sea change in both its policy positions and its comportment in tax negotiations if these values are to be reflected in its fiscal regime and relationships.

The submission to the UN Committee on the Rights of Child – Ireland’s Responsibility for the Impacts of Cross-border Tax Abuse on the Realisation of Children’s Economic, Social and Cultural Rights – was a collaboration between Action Aid Ireland, Christian Aid Ireland, the Global Legal Action Network, Oxfam Ireland and the Ghanaian organisations Isodec and Tax Justice Coalition Ghana.

Tax Justice Network Arabic podcast #57: أزمة الديون المصرية والخصخصة المتسرعة

Welcome to the 57th edition of our Arabic podcast/radio show Taxes Simply الجباية ببساطة contributing to tax justice public debate around the world. It’s produced and presented by Walid Ben Rhouma and is available on most podcast apps. Any radio station is welcome to broadcast it for free and websites are also welcome to share it. You can follow the programme on Facebook, on Twitter and on our website.

أزمة الديون المصرية والخصخصة المتسرعة

في العدد 57 من الجباية ببساطة سلّطنا الضوء على أزمة الديون الخارجية في مصر وما يرافقها من خصخصة “متسرعة” ومدى تأثير ذلك على حياة المواطن البسيط وهل من تشابه مع السيناريو السيرلنكي من خلال لقاء مع الباحثة الإقتصادية والصحفية بموقع مدى مصر بيسان كساب.

In episode #57, we interview Egyptian economic journalist and researcher Beesan Kassab, and discuss Egypt’s current foreign debt crisis, how it is affecting citizens’ livelihoods, and how it compares to the ongoing crisis in Sri Lanka.

أزمة الديون المصرية او الخصخة المتسرعة

تابعونا على صفحتنا على الفايسبوك وتويتر https://www.facebook.com/ TaxesSimply Tweets by taxes_simply

Tax Justice Network’s French podcast: La justice fiscale s’impose, même dans le cadre de l’Aide Publique au Développement #43

Welcome to our monthly podcast in French, Impôts et Justice Sociale with Idriss Linge of the Tax Justice Network. All our podcasts are unique productions in five different languages every month in English, Spanish, Arabic, French, Portuguese. They’re all available here and on most podcast apps. Here’s our latest episode:

Pour cette 43ème édition de votre Podcast en français sur la justice fiscale et la justice sociale produit par Tax Justice Network, nous revenons sur les exonérations fiscales en matière de dépenses financées par l’Aide Internationale au Développement. La question a fait l’objet de discussions dans le cadre des « Journées pour la Fiscalité du Développement » organisées il y a quelques temps par l’OCDE. Plusieurs experts ayant pris la parole ont partagé les réflexions les plus récentes sur cette problématique. Sont intervenants dans ce podcast:

Vous pouvez aussi consulter la totalité des lignes directrices produites sur le sujet, par l’Organisation des Nations Unies

~ La justice fiscale s’impose, même dans le cadre de l’Aide Publique au Développement #43

Vous pouvez suivre le Podcast sur:

CARF permite sonegações bilionárias no Brasil #40: the Tax Justice Network Portuguese podcast

Welcome to our monthly podcast in Portuguese, É da sua conta (‘it’s your business’) produced and hosted by Grazielle David and Daniela Stefano. All our podcasts are unique productions in five different languages – English, Spanish, Arabic, French, Portuguese. They’re all available here. Here’s the latest episode, CARF permite sonegações bilionárias no Brasil #40:

Cerca de 1 trilhão de reais (USD 192 bi)  está para ser julgado no CARF, o Conselho Administrativo de Recursos Fiscais. Mas o que é CARF? O que está sendo julgado? De quem é esse dinheiro? E se grandes corporações e super ricos não pagam impostos, de onde vem o dinheiro para políticas públicas? Tem solução? Essas e outras questões estão respondidas do episódio #40 do É da Sua Conta.

Você ouve no É da sua conta #40:

Participam desse episódio

Isac Falcão, presidente do Sindifisco e auditor fiscal da Receita Federal

Márcio Calvet Neves, advogado tributarista da área empresarial e membro do Conselho Consultivo do Instituto de Justiça Fiscal

Ricardo Fagundes da Silveira, auditor fiscal da Receita Federal e membro do Conselho Consultivo do Instituto de Justiça Fiscal

“ O Itaú deixa de recolher 60 bilhões. A Ambev, 30 bilhões. Aquilo que deixa de ser recolhido ao cofre público vai estar amanhã remunerando, na forma de dividendos, os grandes acionistas.” (Ricardo Fagundes Silveira, Instituto de Justiça Fiscal)

“Os pequenos contribuintes serão sacrificados porque serão chamados a cobrir o rombo deixado pelos grandes sonegadores. É um código que nada ajuda os contribuintes, em nada ajuda a sociedade brasileira.” ( Isac Falcão, Sindifisco Nacional)

“Quando o próprio Estado toma posições mais agressivas do que um consultor tributário, acende um alerta em relação às atittudes anti-republicanas, em relação ao futuro. Isso é sair muito da estrada do caminho do desenvolvimento.” (Marcio Calvet Neves, Instituto de Justiça Fiscal)

Saiba Mais:

Diagnóstico do contencioso administrativo tributário federal e recomendações. Estudo do Instituto de Justiça Fiscal.

CARF: tribunal da Receita tem volume histórico de mais de R$ 1 trilhão em processos parados. Reportagem de O Globo

Transcrição do episódio

Conecte-se com a gente!
 
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 Download do podcast em MP3
 
É da sua conta é o podcast mensal em português da Tax Justice Network. Coordenação: Naomi Fowler. Produção: Daniela Stefano e Grazielle David.  Download gratuito. Reprodução livre para rádios.

Tax Justice Network Arabic podcast #56: ملخص لحلقات ٢٠٢٢

Welcome to the 56th edition of our Arabic podcast/radio show Taxes Simply الجباية ببساطة contributing to tax justice public debate around the world. It’s produced and presented by Walid Ben Rhouma and is available on most podcast apps. Any radio station is welcome to broadcast it for free and websites are also welcome to share it. You can follow the programme on Facebook, on Twitter and on our website.

في هذا العدد السادس والخمسون #٥٦ من الجباية ببساطة نقدم موجز للحلقات التي قام البودكاست بإذاعتها في النصف الأول من عام ٢٠٢٢  

ملخص لحلقات ٢٠٢٢

:تابعونا على صفحتنا على الفايسبوك وتويتر 
https://www.facebook.com/ TaxesSimply 
Tweets by taxes_simply

August 2022 Spanish language tax justice podcast, Justicia ImPositiva: Gustavo Petro y el nuevo equilibrio geopolítico mundial

Welcome to our Spanish language podcast and radio programme Justicia ImPositiva with Marcelo Justo and Marta Nuñez, free to download and broadcast on radio networks across Latin America and Spain. ¡Bienvenidos y bienvenidas a nuestro podcast y programa radiofónico! Escuche por su app de podcast favorita.

En este programa:

INVITADOS:

– Gustavo Petro y el nuevo equilibrio geopolítico mundial

MÁS INFORMACIÓN: