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:
¿Habrá nuevas reglas impositivas para las grandes multinacionales?
Las cortes internacionales que deciden los litigios entre multinacionales y los estados
La banca británica, Estados Unidos y el tráfico de drogas
y América Latina tiene más del 80% del litio mundial, pero ¿puede dar el salto a la producción con valor agregado?
Welcome to the 45th 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.
الجباية ببساطة #45 – لبنان ما بعد الإفلاس
في حلقة هذا الشهر من الجباية ببساطة كان لنا حوار مع الناشط السياسي اللبناني سامر عبد الله، سلطنا من خلاله الضوء على الوضع الصعب الذي يعيشه لبنان على إمتداد سنتين من الإحتجاجات في ظل فوضى سياسية واقتصادية وصلت بالبلاد إلى “إنفجار” إجتماعي مع إنهيار سعر صرف الليرة ومعه انهارت قطاعات أساسية كالدواء والكهرباء، زيادة على إرتفاع نسب الفقر والبطالة والدين العام مع تضخم خانق ألهب الأسعار كالغذاء مثلا الذي عرف زيادةةبأكثر من 400%.
في أخبارنا المتفرقة تناولنا خفض الإنفاق في الكويت والعودة القسرية لليمنيين من السعودية زيادة على إصدار مصر لأول صكوك سيادية مرورا بتعقيدات النظام المصرفي الجزائري والتي تحد من تحويلات المغتربين بالخارج.
In edition #45 of Taxes Simply, we begin with the latest news relating to fiscal justice issues globally and in the Arab region. We then speak with Samer Abdalla, a Lebanese political activist about the latest economic and political developments taking place in Lebanon, looking in particular at the role of corruption in shaping the country.
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:
Accord fiscal international G20/OCDE : L’Afrique a été peu entendue, Edition 31
Dans cette édition de votre podcast francophone produit par Tax Justice Network, nous revenons sur l’accord fiscal international, récemment présenté par le groupe des vingt pays les plus riches de la planète (G20) et l’Organisation pour la Coopération et le Développement Economique (OCDE). Pour certains experts, les négociations ont pris la forme d’une table déjà servie, et dont le menu n’a pas du tout varié, malgré l’arrivée de nouveaux invités. Pour d’autres, les négociations se poursuivront pour avoir des seuils d’application plus réaliste, et une meilleure redistribution.
Interviennent dans ce podcast:
Le Docteur Tovony Randriamanalina, une chercheuse indépendante, expertes sur les prix de transfert, et co-autrice d’un rapport sur la participation des pays faible aux négociations de l’accord fiscal international.
Le docteur Aboubakar Nacanabo, expert de la fiscalité internationale, Inspecteur principal des impôts au Burkina Faso, Président du comité technique de l’ATAF sur la fiscalité transfrontalière et auteur d’un document sur la fiscalité du digital dans la zone CEDEAO.
Accord fiscal international G20/OCDE : L’Afrique a été peu entendue #31
Vous pouvez suivre le Podcast sur:
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O racismo estrutural característico do Brasil se reflete também no sistema tributário, o que reforça a desigualdade e privilegia os brancos em outr. O mesmo ocorre em outras parte do mundo.
No episódio #28 do É da sua conta, entrevistados trazem fatos históricos para explicar como a população negra é afetada por um sistema econômico e social excludente e mostram que mais impostos sobre consumo do que sobre renda, riqueza e patrimônio, ampliam desigualdades e o racismo. Mas é possível ter um sistema tributário antirracista. Ouça nosso podcast para descobrir!
Ouça no É da sua conta #28:
Política fiscal no Brasil é marcada por desigualdades raciais, de gênero e sociais
Os privilégios dos brancos na arrecadação tributária
O racismo estrutural no sistema tributário
Por que a austeridade fiscal, como o “Teto dos gastos” no Brasil, é racista
Waleska Miguel – doutoranda em direito político e econômico
“Os impostos consolidados pelo desenho do sistema tributário funcionou como uma espécie de ferramenta de opressão sem sangue e que manteve a supremacia branca do ponto de vista da economia, do poder político, do ponto de vista social.” Flávio Batista, professor e doutorando em direitos humanos
“A despeito de termos 60% da população em situação de insegurança alimentar, a reforma do imposto de renda que se está desenhando é uma reforma de ampla desoneração da classe média combinada com uma ampla desoneração das empresas.” Clara Marinho, conselheira da Associação Nacional dos Servidores da Carreira de Planejamento e Orçamento (Assecor)
“A comissão de juristas que está fazendo a revisão das normas antirracistas no Brasil apontou que no orçamento, o pensamento da política econômica no Brasil é branca e é masculina.” Waleska Miguel, doutoranda em direito político e econômico
“Eu vejo o orçamento público como principal instrumento de equidade e garantia dos direitos. Está no orçamento público um desenho do que aquela sociedade é e do que ela pretende ser.” Roseli Faria, vice-presidente daAssociação Nacional dos Servidores da Carreira de Planejamento e Orçamento (Assecor)
“Se queremos realmente construir um programa fiscal anti-racista temos de olhar através das lentes da tradição dos radicais negros, dos marxistas negros, dos escritores anti-imperialistas ocidentais.” Keval Bharadia, economista
This article is cross-posted from The Counterbalance, the newsletter of the Balanced Economy Project, a new organisation dedicated to tackling monopolies and excessive market power. It has been slightly adapted for the Tax Justice Network’s blog.
Today we focus on the strange concept of national competitiveness – the ‘competitiveness’ of countries or states (rather than of companies in a market.) “Our nation must be competitive!” politicians and pundits love to cry. “We need a competitive tax system!” It sounds wonderful. Who would want to be uncompetitive?
But what does this concept mean? Is a competitive tax system really a good thing? What about competitive financial regulations, or competitive labour laws? Or, oddest of all, what might “competitive” competition policy look like?
There is more than one possible answer, but in many countries a “Competitiveness Agenda” holds sway. The idea here is that money flits easily across borders, so states must lure it with shiny baubles such as low taxes, financial secrecy, slack financial regulations, low wages, subsidies & incentives, merger- and monopoly-friendliness – and generally weak enforcement. Tax havens are where this agenda has been followed to the maximum.
Yet any well-trained economist will tell you that the agenda rests on elementary fallacies and woolly thinking. If taxpayers must hand out sugar-coated subsidies to attract investors, is the trade-off worth it, what kinds of investors will come, and will other states respond, engaging in a race to the bottom to bring us back to square one? (Today’s Counterbalance author, Nicholas Shaxson, who also works part-time for the Tax Justice Network, has just written an article for Foreign Affairs looking at the international tax dimensions of this, and at a clear-headed new approach from the Biden administration.)
The competitiveness agenda looms largest for countries outside the US, because in smaller economies, cross-border trade tends to form a larger share of the economy, thus making international “competitiveness” more relevant for them.
We’ll focus quite heavily on Britain, where this agenda has long had influence and seems in the ascendancy again after Brexit. We’ll take some detours into tax, tax havens and finance to unpack basic principles, before honing into ‘our’ area – monopoly power and competition. Here, our conclusion will be simple: the dominant vision of “national competitiveness” reduces (and corrupts) competition.
A brief historical aside. The Balanced Economy Project was sparked in 2020 after Michelle Meagher, a competition lawyer, read a long 2019 article I wrote for the Tax Justice Network about the links between tax havens and monopoly power, and asking why there was no coherent anti-monopoly movement outside the United States. We agreed to work together to try and catalyse something: this newsletter, among other things, is the result.
Competitiveness against competition
Last December the Tax Justice Network commented on a Britain’s Times newspaper article about inaccuracies in the popular Netflix series The Crown, leading some royal-obsessed Brits to call for tighter regulation.
Netflix is covered by a EU-wide regime that allows companies to go ‘forum-shopping’ to find the friendliest regulator (or “lead supervisory authority”). Inevitably, some EU countries, in turn, seek to lure the giants to set up their regional headquarters locally by giving them an easy ride on supervision, in the name of . . . “competitiveness.” Netflix chose the Netherlands, whose regulator, at the time the Times article came out, had “not investigated a single complaint from a British viewer” about it, and a prominent Conservative, Julian Knight, accused Netflix of using the Netherlands as a “flag of convenience” to escape regulation.
The Netherlands isn’t alone, as the digital watchdog Access Now noted:
Why Ireland, the Netherlands and Luxembourg? A 2017 presentation about tax havens, by the French economist Gabriel Zucman, suggests an answer:
Our emphasis added. Those three countries are major corporate tax havens: each competes on offering multinational firms an easy ride not just on tax, but also on privacy rules, enforcement, and other lures to encourage multinationals to locate business activity there. In small countries it is relatively easier to capture and influence the legislature, the politicians, the media, and the zeitgeist. A race to the bottom on standards ensues.
These “competitive” processes undermine the very foundations of globalisation theory. Capital and investment was supposed to flow to where it is most productive, but instead, it gets redirected to where it can obtain the greatest subsidies, thus discrediting capitalism and globalisation.
To those of us familiar with tax havens, this “competitive” game is offshore business.
The offshore tax haven connection
Nobody agrees what a tax haven is, but their national economic strategies go far beyond tax. In my 2011 book Treasure Islands I define tax havens using two words, ‘escape’ and ‘elsewhere.’ You shift your money or business elsewhere – offshore – to escape rules and taxes you don’t like. Countries compete to attract it. That broad definition encompasses many fields: tax (of course); secrecy (here’s a ranking;) tolerance of financial crime (here’s the Financial Timescalling Luxembourg “a criminal enterprise with a country attached”); data use (there’s a term for this: data havens;) escape from creditors; or financial regulation. Countries compete, too, by offering pro-monopoly policies, as we’ll see.
The end result is one set of light rules for wealthy individuals and large corporations that can afford to escape offshore, and another set of harder rules and higher taxes for lower-income people and more domestically focused small businesses, who can’t.
Brooke Harrington, a sociologist who took a wealth management qualification to study the super-rich, remembers a wealth manager telling her how she had once traveled with her CEO to meet a client outside Europe. At Zurich airport she realised she’d forgotten her passport, but the CEO told her not to worry: indeed, nobody checked their documents, either in Switzerland or at the other end. “The CEO was right,” the wealth manager said. “These people, our wealthiest clients, are above the law.” This deference to wealth, an aspect of Swiss ‘competitiveness,’ is a worldwide phenomenon. Should we be surprised at the recent outpourings of public rage?
The damage to democracy is unmeasurable. But what of the economic costs? Who wins, who loses?
It helps to separate this into two questions. First, what are the costs to the world as a whole, if lots of countries ‘compete’ in this way, offering tax cuts, subsidies, lax rules and other goodies to lure mobile capital to their shores, and stay ahead in a race to the bottom? Second, more selfishly: forget what happens to other countries – will it help my own country to ‘compete’ in this way?
The answer to the first is pretty widely recognised: this race to the bottom is a collective-action problem to be tackled with international collaboration and co-operation. From an OECD’s project to shore up international corporate tax, to the Basel rules on bank safety, such collaborative schemes abound. Yet they only get us so far – countries cheat, and it is also hard to mobilise domestic coalitions to support complex global projects.
The second question is more interesting. If we don’t offer subsidies to mobile capital, will the money run away to Geneva or Hong Kong, making us all poorer? If the answer is ‘yes,’ we are pretty doomed.
If the answer is ‘no,’ though, a world of possibility opens up.
The tax competitiveness puzzle
To clarify how this ‘competitiveness’ works we will first take a detour into the corporate income tax. It is a decent analogy for anti-monopoly policy because (for instance) monopoly-friendly legislation resembles a corporate tax cut: each entails a transfer of wealth from stakeholders in the relevant country to the shareholders of mostly large, profitable, foreign corporations. And instead of receiving public tax subsidies, monopolists use market power to impose private taxes on workers, citizens and consumers.
Take Britain, a poster child for the competitiveness agenda, as this official document in 2013 showed.
Did these ‘competitive’ tax cuts (which went down to 19 percent) subsequently make Britain better off? Was the trade-off — the tax costs, against extra investment, worth it?
The evidence is now in, and the answer is a clear ‘no.’ Indeed, the tax cuts may not have stimulated any useful net investment at all. Britain’s own Chancellor Rishi Sunak shocked many in his party when he admitted in March that:
“Over the last few years we haven’t seen that step change in the level of capital investment that businesses are doing as a result of those corporation tax reductions.”
Why did the corporate tax cuts fail Britain? For several reasons, in fact.
First, a corporate tax is not a cost to an economy, but more like a transfer within it, from corporations to the public. The nine percentage point cut in the corporate tax rate from 2013-2020 now costs the UK over £30bn ($42bn) in lost taxes a year, on official UK estimates, enough to double UK public spending on research and development, with billions left over.
Second, tax is usually a low priority for firms as they decide where to invest. Survey after survey finds that good investors seek good infrastructure, the rule of law, healthy and educated workforces, and access to vibrant local markets – most of which need tax anyway.
Mostly, investors decide where they want to invest, long before they consider the tax rate. For example, Amazon recently encouraged a bidding war among U.S. states seeking to attract its second headquarters, suggesting that the biggest subsidy package would win. Veteran Amazon-watcher Scott Galloway saw through the spin:
“Over the last few years we haven’t seen that step change in the level of capital investment that businesses are doing as a result of those corporation tax reductions.”
He predicted that whatever other states offered, the HQ would end up in the orbit of “the metro area of New York or DC” – which is just what happened.
Paul O’Neill, former boss of Alcoa (and US Treasury Secretary under George W. Bush), gave a business perspective:
“As a businessman I never made an investment decision based on the tax code… if you are giving money away I will take it. If you want to give me inducements for something I am going to do anyway, I will take it. But good business people do not do things because of inducements.”
As we saw in a recent edition of The Counterbalance, large ‘superstar’ corporations have big markups and make the big profits, so pay the most corporate income tax. So ‘competitive’ corporate tax cuts benefit large, dominant firms the most. (That’s another glimpse of the pro-monopoly bias of the competitiveness agenda.)
Furthermore, corporate tax cuts also flow mostly to shareholders, typically overseas (for example, over 55 percent of UK-quoted shares are owned overseas.) So such tax cuts both leak wealth upwards, from small businesses and individuals to large corporations: but also outwards, overseas. From a national self-interest perspective, that’s bad.
And the competitiveness agenda — which implies hanging up a sign in the global marketplace, saying ‘Come Exploit Me’ — will tend to attract predatory players, while the more productive ones would come anyway. As a recent book explained:
“Countries need investment that’s embedded in the local economy, bringing jobs, skills and long-term engagement, where managers send their kids to local schools and the business supports an ecosystem of local supply chains. This is the golden stuff, and if it’s nicely embedded, then a whiff of tax [or public-interest regulation] won’t scare it away. If an investor is more sensitive to tax, then almost by definition it has shallower roots; tax will tend to frighten away the less useful, more predatory stuff.”
Tax, or robust public-interest competition policy, preserves the healthy and deters the harmful.
Worse still, the race to the bottom means that any country that tries to get ahead in this race may soon be back to square one relative to other states – but with a greater commitment to subsidise investors. And that downwards race does not stop at zero, as Amazon’s Hunger Games competition shows: the subsidies just keep piling up.
What goes for tax, goes for finance
We can generalise these tax lessons to other areas. For instance, see this from Britain’s satirical / investigative magazine Private Eye:
In the London Loophole chapter of my book The Finance Curse, I show how this ‘competition’ between financial centres, principally between New York and London, was a core driver of the global financial crisis. Britain handed out vast regulatory goodies to attract risky financiers – and in the end they kept their winnings, while the British people paid the costs.
After the crisis the word ‘competitiveness’ was mostly expunged from the British policy lexicon, but it never disappeared, just went underground. Sunak’s July speech, with plans to “sharpen our competitive advantage” in finance, was just one post-Brexit sign of a wider comeback, across many sectors.
So what is “competitive” competition policy?
Since the 1990s, many politicians fell under the spell of “Third Way” economic policies espoused by US President Bill Clinton and UK Prime Minister Tony Blair. They embraced the Competitiveness Agenda, including an idea that, as Clinton put it, each nation is “like a big corporation competing in the global marketplace.” European policy makers, who had once fretted about how monopolisation had spurred Nazism in Germany (watch out for a future edition of The Counterbalance on this,) slowly lost their aversion to corporate size, and instead imbibed a new story. The new ideas, which emerged in Chicago from the 1970s, ignored questions of power, the structure of markets, or the public interest, and instead narrowed the focus down to the question of whether consumers were getting a good deal. Mergers and bigness were efficient: if workers or the environment or even the tax authorities could be exploited and the ‘savings’ channelled into lower prices, then all was good.
This Chicago agenda was also seen as ‘competitive’ its ‘exploit me’ message would, it was hoped, attract capital and investment. “This merger tsunami is a good sign [and supports] “Europe’s competitiveness,” gushed Europe’s Competition Commissioner Neelie Kroes in 2007. (Not much has improved since: European authorities almost never block big mergers.)
These ideas have spread further afield. As a south Asian competition expert, who wished to remain anonymous, told us:
“a lot of countries are recipients not originators of competition models . . the economic imagination has been global, not domestic . . the idea was, to put in this competition law, and it will attract foreign direct investment (FDI).”
Similarly, a South African competition expert told us:
“FDI has been the main focus why the public interest should not be in competition law.”
(Though as we recently noted, South Africa has started to go against the grain, blocking a Burger King merger on public interest grounds.)
The perils of national champions
Another strand of this way of thinking involves “national champions” (more on them, in future editions of The Counterbalance.) From British politicians looking for “ways we can build trillion-dollar tech companies” to French presidents mulling how to build globe-striding French energy giants, the idea is that countries should soft-pedal on reining in their dominant firms, so that they can become powerful enough to go head to head with (for instance) Americans or Chinese firms in the global marketplace, and that this, in turn, will benefit the nation.
This is an old idea, sarcastically skewered in 1904 by the Norwegian-American economist Thorstein Veblen, (hat tip: Matthew Watson)
“In this international competition the machinery and policy of the state are in a peculiar degree drawn into the service of the larger business interests; so that, both in commerce and industrial enterprise, the business men of one nation are pitted against those of another and swing the forces of the state, legislative, diplomatic, and military, against one another in the strategic game of pecuniary advantage.
. . .
the common man pays the cost and swells with pride.”
Or, as the FT writer Rana Foroohar put it more recently:
“It is easier to capitulate to populism by supporting national champions than it is to craft and pass smart national growth strategies.
The national champions argument boils down to an idea that we must boost our ‘competitiveness’ by sabotaging healthy market competition, so as to let ‘our champions’ grow powerful. The evident confusion here — improve competitiveness by reducing competition — underlines the idea’s intellectual bankruptcy, and indeed that of the entire competitiveness agenda. (Has Facebook’s existence really benefited the United States? The damage it has inflicted is incalculable.)
There has to be a better way. Fortunately, there is – and it is starting to catch on.
From downgrading to upgrading
One can imagine two main routes to something you might call ‘national competitiveness.’ One is the low-tax, low-regulation, low-enforcement, pro-monopoly race to the bottom that I’ve described: in a word, ‘downgrading.’ We’ve tried this since the 1980s, and the results are clear: the massacre of small businesses, soaring inequality, environmental harm, security risks, and popular fury.
The economist Paul Krugman warned about this agenda in 1994, in a now-famous article entitled “Competitiveness: a Dangerous Obsession.” In it, he wrote:
“The growing obsession in most advanced nations with international competitiveness should be seen, not as a well-founded concern, but as a view held in the face of overwhelming contrary evidence. And yet it is a view that people very much want to hold.”
A more sensible alternative approach could be called “upgrading.” Here, governments invest in good things that businesses need – infrastructure, education and health, research and development, and so on. Regulation or tax policy does not seek to attract FDI through giving it an easy ride, but instead shepherds businesses to compete in markets regulated in the public interest, liberated from the monopolising predations of dominant giants. Instead of chasing dominant ‘national champions’ we pursue ideas promoted over a century ago by the U.S. Supreme Court justice Louis Brandeis: a distributed infrastructure of supply, with many competing players all down the supply chains, each regulated in a level playing field and the public interest.
Take, for example, Britain’s music industry. The “downgrading” strategy favours letting streaming services and other music behemoths exploit British musicians, in the hope that the giants will invest more in Britain. But, as campaigner Tom Gray put it:
“The British political class have been convinced by the major labels – let’s be clear: foreign-based multinational companies – that they are the great driver of British music. When in fact British musicians are the driver of British music.”
‘Upgrading’ to stop the giants preying on musicians would unleash an explosion of creativity and, yes, an export surge of wonderful British music, spreading good vibrations globally.
There’s no need think about upgrading in terms of ‘competitiveness’ relative to other nations. If Germany improves its education, upgrades its financial regulations to protect its taxpayers better from risky speculation, or invests in vaccine research and development, French people won’t lose out. On the contrary, these improvements will make French employees and taxpayers more productive and richer, as better-off German consumers buy more French goods. Better vaccines help everyone. Competitiveness, Krugman said, often turns out to be “a funny way of saying ‘productivity’ ” – not relative to other nations, just on its own.
The good news here is that we don’t need to bow down to mobile capital and ‘downgrade to compete’ – we can just do what our voters want. There is no trade-off: we will have both a stronger democracy, and greater prosperity.
The other good news is that – while the agenda may be making a comeback in the U.K. after Brexit, the Biden Administration in the U.S. is deliberately stepping away from it. In April, Treasury Secretary Janet Yellen made the clearest policy statement repudiating the agenda, favouring the upgrading route over the downgrading.
“The US will compete on our ability to produce talented workers, cutting edge research & state-of-the-art infrastructure, not on whether we have lower tax rates than Bermuda or Switzerland. It’s a self-defeating competition, and neither President Biden nor I are interested in participating in it anymore.”
This attitude goes far beyond tax too. The appointments of Lina Khan and Jonathan Kanter to head the U.S.’ two main antitrust agencies, respectively the Federal Trade Commission and the Department of Justice’s Antitrust division, signal a potentially dramatic policy shift in favour of small businesses and ordinary folk, at the expense of dominant (and mobile) multinationals. They represent a stunningly successful anti-monopoly movement in the United States (sometimes known as the New Brandeis Movement) which has heavily influenced our thinking. A presidential Executive Order has backed this up recently with a wide set of curbs on monopoly power. This is a ground-breaking, world-changing shift in approach that potentially leaves other countries far behind.
This, at last, is the sort of global race where it’s good to lead the pack. Who will follow?
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:
Semanas cruciales para el nuevo impuesto global para las grandes multinacionales.
La estrategia de los países en desarrollo para que se escuchen sus intereses en este nuevo impuesto internacional corporativo
Inflación global, ¿por qué los precios están subiendo en todo el mundo?
Y Chile, ¿podrá la asamblea constituyente lograr los cambios constitucionales que necesita el país?
Mathew Gbonjubola, Director de Política Fiscal de Nigeria
Jayati Ghosh, comisionada de la Comisión Independiente para la Reforma del Impuesto Corporativo Internacional ICRICT y profesora de Economía de la Universidad de Massachusetts
Pour cette édition de votre podcast en français produit par Tax Justice Net nous revenons sur l’endettement de l’Afrique. Elle est jugée importante, mais elle est surtout perçue comme étant irresponsable. Aujourd’hui, le remboursement de la dette occupe une part non négligeable des dépenses dans les budgets publics, c’est-à-dire des impôts payés par les citoyens.
L’actualité aura aussi été marquée par l’utilisation des fonds covid au Cameroun. La société civile est inquiète des dérives et des détournements présumés, malgré les explications du gouvernement.
Et pour ceux qui ont l’application Stitcher et iTunes ect
Si vous souhaitez recevoir cette production ou être média partenaires ou simplement contribuer, vous pouvez nous écrire à l’adresse Impôts_sociale@outlook.fr
We are disappointed to see recent attempts by some of Tax Justice Network’s 2003 founders to subvert our current strategy process. “Founder’s syndrome” is a well-known problem that has faced many organisations as they grow and professionalise. The behaviour here goes beyond what might be considered normal even in that context, however, creating a false impression of our work and violating the trust and right to a safe working environment of our staff and members.
We condemn any attempt to misrepresent and coerce discussion within the Tax Justice Network, to bully opposing views or to claim sole ownership of the tax justice movement. These behaviours are fundamentally in opposition to the spirit of mutual respect and solidarity to which we and the wider movement are committed.
Over the past strategy period 2016-2021, during which John Christensen remained involved in strategic decision making at the Tax Justice Network as an executive director until May 2021 and Chair of the Board until yesterday, the Tax Justice Network recovered from the financial brink and began to repair relationships that had broken down, grew sustainably and achieved unprecedented campaigning success.
As the global tax justice movement continues to expand and the global policy landscape to develop, the Tax Justice Network continues to work closely with the Global Alliance for Tax Justice and other partners, evolving our approach to provide strategic support nationally and regionally and to help secure key policy solutions at the international level.
We strive to be inclusive of all voices and are deeply disappointed by actions taken by some to drown out others, and to claim sole ownership over the tax justice movement for themselves. The fight for tax justice would not have marked up its extraordinary successes in policy change and narrative shift without the contribution and endeavours of our founders; but the tax justice movement belongs to people everywhere – those who fight for it and those who stand to benefit from it. While we respect differing views – and precisely because we do – we reject the idea that only the founders, “the true visionaries”, can legitimately set strategy on tax justice.
We thank the many people and organisations across the tax justice movement who have already privately contacted us to express their support. We apologise to our peers and all those we work with for the personal and professional distress today’s developments may have caused. We note with sadness John Christensen’s resignation from the Board of Directors. We warmly acknowledge his important contribution to tax justice, and wish him the very best in his retirement.
The Tax Justice Network will continue to develop our strategy, consulting across the global tax justice movement and beyond for input, and share public updates on our strategy as planned. We look forward to achieving further historic successes together in the coming years, and supporting everyone’s right to tax justice. Tax justice is yours.
Welcome to the 43rd 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 for listeners to download. Any radio station is welcome to broadcast it for free and websites are also welcome to share it. You can join the programme on Facebook and on Twitter.
في حلقة هذا الشهر من “الجباية ببساطة” كانت لنا جولة في الأخبار المتفرقة بين ليبيا، لبنان وتطور الوضع السياسي في تونس قبل أن يجمعنا حوار مع الباحثة في السياسات العامة والشؤون الدولية، سرين الغنوشي حول ورقة أصدرها المنتدى التونسي للحقوق الاقتصادية والاجتماعية بخصوص تعامل الحكومات التونسية مع جائحة كوفيد 19 ومدى مساهمته في تأزم وضع الفئات الهشة والجهات الداخلية للبلاد في ظل ضعف البنية التحتية و إارتفاع كلفة العلاج نتيجة تراجع الإنفاق الحكومي في قطاع الصحة.
It’s strange to write this down, but Tax Justice Network nearly ceased to exist a few years ago. Now we’re coming to the end of the strategy period that began from that position of frailty, and it’s a whole new world. For good – from the strengthening of Tax Justice Network itself, to a series of powerful achievements for the worldwide movement. And for ill – literally, in the case of the pandemic and figuratively, in the apparent deepening of rich countries’ opposition to a fairer global distribution of taxing rights.
Our annual conference earlier this month brought together leading global voices on tax justice and human rights, exploring powerful opportunities for national and international policy changes and narrative shifts. It also challenged us over the ways that we work with partners globally, and how we marry expertise and activism.
Our current strategy, designed in 2016-17, runs to the end of this year. It’s a good moment to catch a breath and think a little about the next phase of tax justice. Without prejudging the full review, we can look back at some of the key changes over that period, and then forwards to some of the decisions and opportunities ahead.
Looking back…
After taking up the role of Tax Justice Network’s director of research in 2015 (I had turned down the initial offer to become chief executive), it quickly became apparent that we were financially close to failure. Over a period of months, there were repeated discussions about how much of our salaries the directors could afford to suspend, in order for the whole team to be paid. And so in 2016, some five years ago now, I accepted the role of chief executive.
Lest this sound like a complaint, the first thing to say about those five years is that they have been a time of extraordinary recovery and growth. Tax Justice Network did not go bust. Instead, we flourished. It’s been an absolute privilege to work with a quite brilliant team of people, from communications and advocacy to legal and quantitative analysis, and crucially also of operations experts as we’ve moved from start-up phase into a period of rapid professionalisation.
I’d been in and around the wider tax justice movement since the turn of the millennium. Working as a junior researcher at Oxford with Prof Valpy FitzGerald (now a commissioner at ICRICT), I’d had the eminent good fortune to be involved in the background work behind a couple of the moments that seem somewhat pivotal in hindsight. We had a small hand in contributing to and reviewing the famous Oxfam report of 2000 on tax havens, in which John Christensen, Sol Picciotto and others had been centrally involved. And we were privileged to hold the pen for enough of the process to ensure that the UK government’s 2000 white paper on globalisation included what was then quite ground-breaking recognition of international tax issues:
“Taxation of the profits of transnational corporations operating in developing countries provides an important mechanism for sharing the gains from globalisation between rich and poor countries, and for reducing poverty through generating adequate revenue for investment in health and education… There is a need for greater international co-operation to avoid [a] ‘race to the bottom’.”
From the perspective of an engaged outsider, the early years of Tax Justice Network seemed to fly. By the 2007 launch of Tax Justice Network – Africa at the World Social Forum in Nairobi, the continuing progress of the movement seemed almost inevitable. The expertise and commitment of activists worldwide would surely build to global impact?
But five years later, lines were being drawn. Our co-founders John Christensen and Richard Murphy wrote a paper on ‘The Next Ten Years of Tax Justice’, proposing a division between a ‘non-campaigning’ Tax Justice Network to lead on research, and a separate global body to lead on activism. The latter spun out as the Global Alliance for Tax Justice in 2013, the umbrella body for mass mobilisation worldwide.
Two things that I’d never appreciated from outside, while working on tax justice at international NGOs and research organisations, were the organisational fragility of Tax Justice Network; and the relationship damage caused by the organisational separation. By 2015, it turned out, both were at something of a low point.
Organisational recovery and flourishing
The financial and organisational issues were the more obvious ones, from the inside – but also, as it turned out, the easier ones to address.
From that low point, we have built a diverse funding base including a range of foundations and national governments. Reflecting the growing faith of funders, we doubled our annual expenditure from 2015 to 2019 alone, and have built up committed income and reserves with a view to ensuring our future sustainability.
As important, we have professionalised fully, putting in place the set of policies necessary for a responsible employer operating in multiple countries and regions of the world. We’ve added the tech platform to make this global remote working really fly, and ways of working across timezones and cultures. And we have put in place a governance structure that maintains the cooperative ethos long held dear, with members retaining the ultimate power to determine the organisational direction, but also ensures independent accountability through non-executive directors – with the latter, for example, responsible for agreeing changes to compensation and benefits. Following team consultation, expert advice and a thorough benchmarking exercise, we moved from the previous somewhat unstructured and unfair distribution that had emerged from our ‘start-up’ phase, to establish a payscale based on transparent and explicit criteria. The ratio of the highest and lowest salaries is currently 2.7.
Introducing team retreats during the year, to allow in-person interactions among the global team, had strengthened bonds in important ways. So when the pandemic struck, we had the advantage of being fully remote already, and as good a base of personal relationships as we could hope for in a dispersed global team. It has been hard, and it continues to be hard. But we are committed to a practice of caring for each other within the team, and the conversations are always ongoing about how we can strengthen that in different ways.
An important underpinning of this whole organisational strengthening was a five-year commitment from the Ford Foundation. Two elements were crucial. First, the engagement of Rakesh Rajani, leading the Foundation into an understanding of tax justice and a decision to support it – and encouraging us to lay out a strategy for systemic change (‘build it and they will come!’), rather than look to address funders’ immediate interests. And second, the Foundation’s BUILD program designed specifically to support ‘organisational resilience’ – everything from the provision of expert consultants with understanding of issues like founder’s syndrome, through to a positive encouragement to commit their funds to building our reserves.
It’s a great sadness that Ford switched focus within a couple of years, but to their credit that they maintained this support anyway. We would not be the organisation we are today without it, and much of what has been achieved would instead have been lost. Coupled with the consistent policy-led engagement of key funders like Norad, this support has been transformative.
Thematic priorities
In terms of activities, each of the four workstreams in the strategy we laid out has delivered substantial progress. Perhaps the deepest work has been that of the workstream on tax justice and human rights, led by Liz Nelson (who is also a Senior Atlantic Fellow for Social and Economic Equity). This has developed with a range of partners including the Global Alliance for Tax Justice and the Centre for Economic and Social Rights, and valuable funding from the Wallace Global Fund, a powerful analysis that is increasingly recognised in both the human rights discourse and across the tax justice movement. Tax justice perspectives are increasingly reflected in country assessments under a range of UN human rights instruments; and human rights arguments are increasingly central to advocacy for tax justice in national policy debates.
Our annual conference earlier this month focused on this workstream and saw the launch of a major new report, Tax Justice and human rights: The 4 Rs and the realisation of rights. A stellar global cast was testimony to the platform that Tax Justice Network has built, and the strength of partnerships in this area in particular. Speakers and discussants included Andres Arauz, Ecuadorian presidential candidate; Attiya Waris, Associate Professor of Fiscal Law and Policy at University of Nairobi, and the newly appointed UN Independent Expert on the effects of foreign debt and other related international financial obligations of States on the full enjoyment of human rights; Dorothy Brown, Professor of Law at Emory University and author of The Whiteness of Wealth: How the Tax System Impoverishes Black Americans- and How We Can Fix It; Irene Ovonji-Odida, women’s rights activist and member of both the UN FACTI Panel and ICRICT; Logan Wort, Executive Secretary at the African Tax Administration Forum (ATAF); Paul Caruana Galizia, on behalf of the family and foundation of Daphne Caruana Galizia; and Philip Alston, Professor of Law at NYU and recently UN Special Rapporteur on extreme poverty and human rights.
The workstream on financial secrecy led by Dr Markus Meinzer has consistently delivered our flagship Financial Secrecy Index, and has successfully introduced the complementary Corporate Tax Haven Index. Together, these have been recognised in policy spheres and in research as unique and technically excellent contributions. At a campaigning level, they have supported a powerful shift in public narratives towards the understanding that financial secrecy and corporate tax abuse are largely driven by rich countries, promoting illicit financial flows and corruption around the world.
The index teams have also been consistently innovative. Where the human rights workstream has contributed to establish tax justice within a much wider discourse and international political canvas than could have been imagined ten years ago, the secrecy workstream has gone far beyond the initial ambitions of challenging weak ‘blacklists’, and overturning the narrative of corruption as a problem of lower-income countries, and has developed a whole series of analyses and tools that are increasingly being used by national authorities to strengthen their responses to tax abuse, of which the Illicit Financial Flows Vulnerability Tracker has been especially important. In addition, detailed policy work on aspects of the ABC (automatic exchange of information; beneficial ownership transparency and country by country reporting) has taken each far beyond the original ideas set down by the Tax Justice Network in the early years.
The workstream on the race to the bottom has also contributed to progress in shifting narratives, building the view that tax (and regulatory) competition damages the ‘winners’ and the losers alike. Major outputs include the Balanced Economy Project, which has been incubated and fledged as an independent organisation to lead analysis and campaigning on the threats of monopoly power; the continued strengthening of the ‘finance curse’ argument (that too much finance is damaging for economies and societies), including through Nicholas Shaxson’s book of the same title; and John Christensen’s forthcoming film that will address these issues.
The workstream on the scale of tax injustice has focused on strengthening the evidence of the damage of tax abuse and its profile, and on embedding that analysis – including of the disproportionate losses suffered by lower-income countries – in public narratives and policy processes alike. Outputs include a range of peer-reviewed journal articles, and two books – a more academic volume published by Oxford University Press, and a lighter piece, The Uncounted. These outputs have provided the basis for Tax Justice Network to play a leading role in a range of policy processes, including work on defining the indicators of illicit financial flows for the UN Sustainable Development Goals target, in driving an agenda for global architectural reform, and both technical and political engagement in the OECD tax reform process that is still ongoing.
The work has culminated in our new annual flagship report, the State of Tax Justice, which provides for the first time a country-level estimate of revenue losses due to cross-border tax abuse by multinational companies and by individuals. Published in conjunction with the Global Alliance for Tax Justice (the umbrella body for mass mobilisation organisations worldwide), Public Services International (the tax lead of the seven global union federations) and the German foundation FES, the State of Tax Justice offers a platform for national and regional tax justice activists to raise the profile of their demands each year.
Impact and communications
The much greater depth of expertise in the team has been coupled with an expansion of the longstanding strength in communications. The Taxcast series of podcasts, led by Naomi Fowler, has been expanded from the original English to include monthly Spanish, Portuguese, French and Arabic language versions also, focusing variously on Latin America, Francophone Africa and the Middle East.
Alongside social media improvements, the Tax Justice Network doubled the volume of traffic to its website from 281,379 total sessions in 2015 (an average of 23,448 sessions per month) to a record total of 588,205 sessions in 2020 (an average of 49,017 sessions per month).
In external media, Tax Justice Network doubled the volume of coverage gained on a monthly basis from the period 2009-2015 to the strategy period 2016-2021. We gained an average of 223 media hits per month in 2009-2015 and an average of 467 media hits per month in 2016-2021. This increase in media coverage was matched by a proportional increase in coverage from high profile media sources. We gained an average of 14 media hits per month from high profile media sources like the Financial Times and the Washington Post in 2009-2015, and an average of 28 media hits per month from high profile media sources in 2016-2021.
A core part of this growth in media coverage has been the continuing strengthening of the indices, and the introduction of the State of Tax Justice report. In recent years we have built up the global media reach of the Financial Secrecy Index and the Corporate Tax Haven Index, so that their launch weeks obtained media coverage with a combined circulation reach of 0.4 billion (Financial Secrecy Index 2018) and 0.73 billion (Corporate Tax Haven Index 2019); then 2 billion (Financial Secrecy Index 2020) and more recently 4 billion (Corporate Tax Haven Index 2021).
The State of Tax Justice eclipsed even this, with a launch week reach of 8 billion, and has continued to be widely cited in policy documents, including in various United Nations outputs – not least, the FACTI Panel report. EU MEPs adopted a resolution to improve the EU blacklist of ‘non-cooperative jurisdictions’ just a few weeks after the launch of the State of Tax Justice, directly quoting our analysis that the blacklist covers “less than 2% of tax abuse”. The State of Tax Justice has also provided key reference figures for the scale of tax injustice in less politically ‘natural’ publications such as the report of the advisory group of the G7 countries prepared for their UK summit, and a report of the World Economic Forum’s Global Futures Council.
Importantly, this is not profile for its own sake. As the Tax Justice Network has become increasingly established as a credible and legitimate voice on international tax issues, so too have we been able to achieve normalisation of a range of tax justice proposals once considered too radical to mention.
Our framing of the G7 agreement on the G20/OECD global tax deal was widely adopted in media and press. The Tax Justice Network was referenced in 4% of all articles published around the world on Monday 7 June 2021 about the G7 tax deal agreed over the preceding weekend. These articles accounted for 11.5% of all global media reach gained by all the articles published on the G7 tax deal on Monday 7 June 2021. In other words, over 1 in 10 articles read on Monday 7 June 2021 around the world about the G7 tax deal quoted the Tax Justice Network.
A core element of our narrative – that the global minimum tax rate is potentially a great step forward, but that the specific deal in prospect disproportionately favours the G7 and other high-income countries, while exacerbating the global inequalities in taxing rights facing lower-income countries – has been carried far and wide. This has allowed us to raise up voices of lower-income countries in a way that has no precedent in any previous OECD process. (Not unrelatedly, we have been targeted repeatedly by the OECD secretariat to negotiators, ambassadors, at the UN, and to media – but sadly for them, this has served only to strengthen our profile.)
Or consider another example with genuinely transformative potential for the global tax architecture: with our partners in the State of Tax Justice 2020 report, we have put the proposal for a UN tax convention on the map. In the seven months before the launch of the State of Tax Justice 2020, the term “UN tax convention” had an average monthly media reach of 348,000. In the launch month of November 2020, the term gained a reach of 1.7 billion. 83 per cent of stories published with the term “UN tax convention” in November 2020 reference the Tax Justice Network, almost all of which were about the State of Tax Justice 2020. From April 2020 to date, half of all media reach for the term “UN tax convention” included reference to the Tax Justice Network.
Our ability to drive previously unthinkable narrative shifts and policy consideration stems from the combination of our deeper research capacity and the technical strength of our outputs; with the growing power of our communications work, based on the comprehensive professionalisation of the organisation.
Relationship building
In contrast to the success of that transformation, the harder issue – of relationships within the tax justice movement – is one where I have to hold my hands up to having failed to identify the extent of the issue at the outset, and having failed to act with the necessary speed.
In this year’s annual tax justice lecture, we invited Dr Dereje Alemayehu, the executive coordinator of the Global Alliance for Tax Justice, to reflect on the challenges of the movement. He pulled no punches. Laying out a history of paternalistic and dismissive behaviour from ‘experts’ in the global North to their ‘activist’ counterparts in the South, he set out a key challenge: to bring expert and activist approaches together, in mutual respect and solidarity.
This is crucial, if tax justice is to move forward together with the impact that we wish to have, and in the spirit of care for one another and an understanding of the inequalities and discrimination embedded in our world by the unfair economic practices we seek to challenge – and without which, ‘tax justice’ seems little more than a slogan.
Looking forwards…
As our existing strategy comes to a close and we review while developing the new one, there will be time and opportunity to consider each element in more detail.
Many of the central pieces of our approach are already clear though, among them: global campaigning, in partnership; global communications and media reach; technical excellence; high-level advocacy; built upon financial resilience and robust governance.
Thematically, we will continue to build upon the outline of issues that John Christensen and colleagues began expertly to develop in the early 2000s, and of which we have since solidified key elements and increasingly taken them further.
On the corporate tax side, we now have a clear position towards unitary taxation with formulary apportionment, backed by a fair global minimum effective tax rate. The tax transparency umbrella is formed by what we have coined as the ABC: automatic exchange of tax information, beneficial ownership transparency, and public country by country reporting. The global architectural requirements include a UN tax convention, setting the basis for intergovernmental negotiations under UN auspices, and a UN centre for monitoring taxing rights; and the continuing development, with our partners at ICRICT, of the arguments and technical basis for a global asset register, in turn supporting the case for wealth taxes.
We will continue to extend the analysis of tax justice in a range of areas. We’re likely to pay greater attention to the pressing threat of the climate crisis, to the extent that we can make clear contributions without duplicating the efforts of others. We may put more emphasis on the role of tax collection, recognising the political threats to tax authorities and the regressive impact of cuts; and on the continuing scale, opacity and ineffectiveness of tax expenditures. And we’re likely to address some important questions of race and reparations, from a tax perspective.
Perhaps more important than individual areas is the overarching aim – which will be to approach tax justice as a feminist issue. Adding specificity to this, to ensure it too is more than a slogan, will be key. We are now clear that we must take a rights-based approach in all our work, and one that challenges intersectional inequalities head-on. That includes reflecting on the many processes of racialisation and minoritisation embedded in the legacies of imperial capitalism on which so much of our current inequalities rest – and without an understanding of which, any tax ‘justice’ can be superficial at best.
This understanding must continue to lead our own behaviours and operations, not only to inform our analyses – from Tax Justice Network’s engagements in the wider movement, to our internal processes and interaction.
Feminist leadership isn’t built on rigid hierarchies, or dictating plans. Caring for others, dismantling bias and the sharing of power are among the central principles that Tax Justice Network will strive to meet. And tax justice itself? Well, that definitely isn’t mine, or even ours – it’s yours.
Together, we can change the weather. We must. Let’s do it.
John Christensen, founding director of Tax Justice Network and former economic adviser to the British Crown Dependency of Jersey, stepped down today as the chair of the board of Tax Justice Network.
John retired as an executive director at the end of May this year. When he passed on the chief executive role in 2016, his successor and our current chief executive, Alex Cobham, wrote of John’s successes: “In changing the political weather on these issues, those achievements are nothing short of extraordinary.”
In a message, John told us: “I will continue with my activist role with the Balanced Economy Project and the Corporate Accountability Network. I will also remain on the governance board of the OECD/UNDP Tax Inspectors Without Borders programme. In addition, I am very actively involved with the conservation work of the Chiltern Society.”
We record our thanks to John for his powerful contribution to tax justice, and wish him all the best.
After a long fight by the family of murdered journalist and anti-corruption champion Daphne Caruana Galizia, their lawyers and supporters, the public inquiry the Maltese government never wanted has now reported on its findings and has made recommendations. As the Daphne Caruana Galizia Foundation explains:
The Maltese Government only agreed to establish the public inquiry, over two years after the assassination, under threat of legal proceedings from the family and in the face of international pressure.“
The Foundation has made the following statement:
The inquiry’s findings confirm the conviction our family held from the moment Daphne was assassinated: that her assassination was a direct result of the collapse of the rule of law and the impunity that the State provided to the corrupt network she was reporting on. We hope that its findings will lead to the restoration of the rule of law in Malta, effective protection for journalists, and an end to the impunity that the corrupt officials Daphne investigated continue to enjoy. Daphne and her work will live on in ensuring that the recommendations of this Inquiry effect lasting change.”
The report makes many recommendations, on the urgent need to transform the relationship between business and government, the police force, and to protect journalists. Here are a few of the reactions:
It's been like one long day since we started hammering out Malta's first public inquiry in November 2017 with all our exceptional, tireless, brave lawyers. Today:
The State of Malta must be held responsible for my mother's assassination.https://t.co/OG32IqlX3P
— Paul Caruana Galizia (@pcaruanagalizia) July 29, 2021
The best possible outcome of Daphne's assassination is for it to be the first and last. https://t.co/NoQtDJy7JM
This morning our family received its copy of the 437-page report into my mother's assassination. It concludes that the Maltese State bears responsibility for her death. 1/ https://t.co/zR7WdFRlm2
— Andrew Caruana Galizia (@acaruanagalizia) July 29, 2021
"This is a historic opportunity to ensure real change for the safety of journalists and to a process of national healing following the traumatic assassination of Daphne Caruana Galizia on 16 October 2017." #DaphneCaruanaGalizia#PublicInquirypic.twitter.com/yfK9hyBaqq
— Daphne Caruana Galizia Foundation (@daphnefdtn) July 29, 2021
Malta has long displayed all the marks of a nation suffering from the finance curse – state capture and corruption of democracy through an aggressive, over-sized finance sector model, with financial secrecy at its heart. According to retired judge Michael Mallia, former chief justice Joseph Said Pullicino and Madam Justice Abigail Lofaro in their public inquiry report:
The state should shoulder responsibility for the assassination,…[there was] an atmosphere of impunity, generated from the highest echelons of the administration inside Castille, the tentacles of which then spread to other institutions, such as the police and regulatory authorities, leading to a collapse in the rule of law”.
while the inquiry did not find proof of government involvement in the assassination, it created a “favourable climate” for anyone seeking to eliminate her to do so with the minimum of consequences.”
Believe me when I say there aren’t many areas where the two major parties in Malta come to an agreement, but they agreed on this one thing – do not threaten the stability of the financial sector. And so it almost became beyond criticism, you know, whatever you do, you just don’t threaten finance. And that only became more of a thing as the financial sector took up an increasingly larger share of the economy.
I’d say for my mother…the really big problems became apparent, say 2013, around that point when there was a step change, when there was a change in government, and there was this radical liberalisation and deregulation of the financial sector…the country just went down this very aggressive, hyperfinancialisation, hyper-development route, with an aim to one day become like Dubai, you know, like a hyper-financialised, hyper-globalised city state…
The amazing thing about my mother’s career is that she went from reporting on domestic corruption, which at the time was say, a corrupt judge, a corrupt MP, corrupt prime minister, to almost imperceptibly reporting on globalised corruption, you know, from reporting on bribery at a level of say 20,000 euros to reporting on bribery of tens of millions of euros,..ultimately because of secret companies, because anonymous shell companies are really the key.
The Panama Papers leak, that kind of cracked this wall of secrecy that she kept hitting at, hitting at, hitting at until the crack opened up letting in more light, say, that she could suddenly see what was happening behind the wall. And the moment, it’s amazing, that the moment she got there, right, she got to the final company and she said, ‘this is it. I just need to find the name’, she was murdered. And, you know, the person who murdered her made the calculation that there was only one person who could have got the name of the company, ‘and now she’s dead, I had her murdered, so I’m safe.’ But through another series of accidents, he was, he was found out. But that, you know, the murder was to protect a secret, the shell company, so to protect the secrets of massive corruption.
My view is really straightforward, that the privacy arguments for anonymous shell companies are far outweighed by the public interest argument against them. And I just don’t think they should exist anywhere in any form. But before we get there, I think there are serious reforms that need to be made of the sectors that we call enablers, the accountants, the lawyers, the fixers, I think, I think it’s crazy that they can open up shell companies for politicians and oligarchs in this way, and we’re somehow meant to say, ‘hey, that’s their job.’ I just think that’s unacceptable.”
We were honoured that the Caruana Gailizia family accepted the Anderson-Lucas-Norman Award for Tax Justice Heroism at our recent virtual annual conference on tax justice and human rights, which you can view and read about here.
Our award is named after Jean Anderson, Pat Lucas and Frank Norman, three Jersey islanders who were among the first to challenge the financial sector’s state capture of Jersey, sparking the global tax justice movement. This award honours the people or person we believe has made the most significant contribution to tax justice and financial transparency. It seeks to recognise heroic work in the fight for tax justice. We presented that award to the Caruana Galizia family, which was accepted here by Daphne’s son Paul Caruana Galizia:
The Daphne Caruana Galizia Foundation speaks of ‘light after darkness.’ Paul Caruana Galizia told us in our podcast:
In Malta’s case the story is far from over. A lot of the changes that need to happen in the country have yet to happen. My mother’s case is still ongoing, journalists still operate in a highly threatening environment. But the country, if we grow out of this, rather than end up suffering even more from it, will, we hope provide an example to a lot of other jurisdictions around the world that find themselves stuck in this trap where they think corruption will always be with them, that they will never grow out of this financial sector dominance. I hope that will emerge from this as a positive example against those issues.”
#27 Imposto de renda: empresas e ricos devem contribuir mais
Enquanto o mundo retoma o debate sobre a necessidade de taxar mais grandes empresas, e já tributa há anos a distribuição de lucros e dividendos, para distribuir a renda de uma forma mais justa, o Brasil segue na contramão, mesmo na recente proposta de reforma do imposto de renda.
“O local por excelência para lidar com a questão da desigualdade é a tributação de renda e patrimônio, em particular a tributação de renda.” – Rodrigo Orair, pesquisador e especialista em política fiscal, tributação e desigualdade
“Falar em queda de arrecadação no Brasil é muito complicado, porque vivemos uma crise fiscal expressiva e ao mesmo tempo precisamos garantir bens e serviços públicos e principalmente a proteção social para lidar com os efeitos da pandemia. Então, eu não vejo espaço fiscal para reduzir carga tributária no momento.” – Débora Freire, professora de economia da UFMG
“As grandes reformas da tributação não são feitas em momentos de paz e tranquilidade, mas em momentos de crise aguda. Nós temos uma janela de oportunidade histórica pra avançar efetivamente” – Paulo Gil Introini, diretor do Instituto de Justiça Fiscal.
Especialistas entrevistados no episódio #27 do É da sua conta defendemque grandes corporações e as pessoas mais ricas contribuam mais para que o país possa proteger sua economia, garantir direitos e reduzir desigualdades. Esses são também os objetivos de uma reforma tributária baseada em justiça fiscal.
Ouça no É da sua conta #27:
Mudanças no imposto de renda devem respeitar os princípios de direitos humanos para garanti-los e reduzir desigualdades
Detalhamento da proposta de reforma do imposto de renda em discussão no Brasil
Tributação de lucros e dividendos
Proposta para empresas contribuirem menos com o imposto de renda no Brasil na contramão da realidade internacional
Education provides the “foundations for individual autonomy, liberty and human dignity”. (1)
Yesterday marked the start of the Global Partnership for Education’s (GPE) two-day Summit, which is hosted by the Nigerian and UK governments. The Global Education Summit: Financing GPE 2021-2025, which you can join live (2:00pm BST), aims to explore “with key partners the role of education in the face of today’s key challenges”.
We’ll be listening carefully to the debates and most importantly the political commitments. Meaningful action is especially needed on two of the challenges to be explored in the Summit: financing education and advancing gender equality.
The Abidjan Principles underline states’ obligations to establish free, quality, public education systems for all. Public services, therefore, should be the central way in which governments support the realisation of the right to education, and thus open up lifelong opportunities in further education, training and access to paid employment. Access to education needs to be delivered consistently and sustainably. Schools and other centres of education along with the educators and support teams of carers, specialists, and technicians needed to operate them are critical to deliver the right to education. So too is the public transport and digital infrastructure to ensure all children have access to education.
Where resources are scarce, girls fare less well than boys in terms of opportunities and accessing education. This is because girls and women adult learners are disproportionately burdened by structural and systemic discrimination. Girls will be depended upon to undertake the burden of caring for others within the family and wider communities. Girls will also be expected to provide income to the household in many different ways including tending crops, small scale manufacturing, domestic labour and can become victims of trafficking.
Social and economic policies need to be dismantled and re-designed so that assumptions about the role of girls and the regressive impacts from the failure to fulfil the right to education are addressed in progressive public service policies. Policies, therefore, need to be effective instruments to ensure women and girls, in particular, enjoy the right to education. Social and economic policies need to ensure that women and girls have access to affordable digital services, to accessible public education services and to available social protections.
At the Tax Justice Network we approach the notion of sustainable financing for human rights, including the right to education, through our 4 R’s of tax:
Raising revenue progressively by broadening and deepening the tax base; redistributing income and wealth using taxation policy and so that those who have more contribute proportionately to their wealth and income; repricing market goods and services such as harmful tobacco good or carbon emissions, and strengthening the accountability of governments through the payment of taxes, which ultimately underpins the social contract and effective political representation.
The country profiles of our annual State of Tax Justice report, jointly published with the Global Alliance for Tax Justice and with Public Services International, report on the scale of revenue losses to cross-border tax abuse.
Consider the hosts of the GPE summit. Nigeria is estimated to lose US$10.8 billion a year, or 2.4% of the country’s GDP. For education, over a ten year period an increase in government revenue of 19.67% would be associated with 400,000 children receiving an extra year of education, or roughly 40,000 every year (2). With similarly dramatic losses projected in each other area of public services, it is unsurprising – but most welcome – that Nigeria has been at the forefront of demanding international progress against tax abuse. Nigeria is championing the important UN FACTI Panel recommendations for a new and fairer global architecture to fight illicit financial flows, for example, and standing against OECD proposals on corporate tax that would give the great bulk of new revenues to the richest countries.
The UK loses even more tax from corporate and individual tax abuse – an estimated US$10 billion lost to global tax abuse committed by multinational corporations, and nearly three times that to offshore tax abuse by individuals – roughly US$600 per person. As a high income country, however, the public financial constraint on access to affordable education in the UK is less binding when compared to lower income countries. And indeed, the UK’s losses are in no small part the result of the country’s deliberate strategy of positioning itself at the heart of a network of financial secrecy jurisdictions and corporate tax havens, the legacy of the British Empire. But that strategy means that the UK is responsible for imposing major revenue losses on other countries, with harsh impacts on the available resources for public services in lower-income countries – not least, public education.
The GPE Summit, continuing today, presents a real opportunity for governments, policy makers and a cross section of civil society groups to look hard at and address the financing of global education. As MaryJacob Okwuosa, National Coordinator at Activista Nigeria and Founder at Whisper To Humanity, said this week, “It is time for GPE to take tax seriously” and by implication the governments of the world. That seriousness must be reflected in an intersectional approach to substantive equality in education for girls and women learners.
The technical nature of tax issues may be seen or projected as problematic, but the decisions needed are political, and simple. The GPE should recognise explicitly that tax is the sustainable source of finance for public education, and lend its weight to international efforts to redress the global inequalities that face lower-income countries in exercising their taxing rights.
Sources: (1) Yoram Rabin, The Many Faces of the Right to Education, in D. Barak-Erez and A. Gross (eds), Exploring Social Rights Between Theory and Practice, 2007; (2) GRADE https://med.st-andrews.ac.uk/grade/research/
It’s been two weeks since our Annual Conference but the buzz and energy is still running through our heads and hearts. This year’s Annual Conference, the theme of which was Tax Justice and Human rights, was particularly special to many of us, not just because it marked a return after last year’s conference was cancelled due to the pandemic, but because it also exemplified the way in which tax justice over the past years has been widely adopted into so many spheres for social justice.
The conference launched a foundational report explaining the linkages between tax justice and human rights. In her Foreword, Irene Ovonji-Odida, Ugandan lawyer and women’s rights activist and also a member of both the High Level Panel on International Financial Accountability, Transparency and Integrity for Achieving the 2030 Agenda (FACTI Panel) and the Independent Commission for the Reform of International Corporate Taxation (ICRICT), explained how the report:
“navigates through some of the most salient issues and helps to map the alarming contours of the human rights impacts, [and]…at the centre of these abuses are high-income countries and their dependent territories, and the wide circles of tax and other professionals“
Supported and co-hosted by the Association of Accounting and Business Affairs (AABA); City University, London; and the Tax and Gender Working Group of the Global Alliance for Tax Justice (GATJ), this year’s conference fuelled an energy and a host of conversations which reflect the growth of influence of the global tax justice movement, and the credibility and relevance of tax justice positions for those advocating for human rights and ending inequalities.
The conference opened with Prof Prem Sikka from AABA, founding partner of the conference, Member of the UK House of Lords and Senior Adviser to the Tax Justice Network, presenting a shameful picture of the scale of wealth and income inequality in the UK. While a tiny minority of citizens in the UK are enabled to compound their wealth to obscene levels many, many more live in poverty. Prof Sikka was quick to point out this pattern of wealth and income inequality is one repeated in every country across the globe.
Prof. Sikka took the opportunity, as is tradition at our annual conference, to recognise and honour individuals who have worked to support and promote the work of tax justice. This year, awards were given to Cathy Cross a longstanding Board member of the Tax Justice Network and to James Henry, a Senior Adviser to the Tax Justice Network.
Prof Anastasia Nesvetailova of the Political Economy Research Centre at City University of London (CITYPERC) opened her remarks by noting that the Biden tax plan, whatever its faults and there is indeed much that has been critiqued, is a compliment to the work of the Tax Justice Network and a recognition of the importance of the tax justice movement’s campaigning and analysis. Jeannie Manipon, from Asian Peoples’ Movement on Debt and Development (APMDD) and representing the Tax and Gender Working Group, concluded the welcome address by drawing attention to the opportunities and imperatives for a transformative agenda which places people and the planet at the centre of the movement’s thinking and action. Jeannie echoed a key message from the report launched as the centrepiece of the conference: “Tax justice is, very simply, a feminist agenda.”
Philip Alston, Professor of Law at NYU Law and Chair of Center for Human Rights & Global Justice, and until recently the UN Special Rapporteur on extreme poverty and human rights, encouraged everyone to read the report, and called on civil society to grasp the interconnectedness of tax justice and human rights. The reality, Prof Alston warned, is that any progress civil society organisations make on their issues can and will be “undermined or overturned by changes in the tax system”.
Attiya Waris, Deputy Principal at CHSS, Director Research and Enterprise and Associate Professor of Fiscal Law and Policy at University of Nairobi, and the newly appointed UN Independent Expert on the effects of foreign debt and other related international financial obligations of States on the full enjoyment of all human rights, particularly economic, social and cultural rights; and Steven Dean, Professor of Law at Brooklyn Law School, talked with Alex Cobham, chief executive at the Tax Justice Network, about subtexts and racial bias in tax systems; this theme eloquently and spectacularly built upon by Professor Dorothy A Brown, author of The Whiteness of Wealth, and our first keynote speaker at the conference. Later, the conference was honoured by a second keynote by Andres Arauz, Ecuadorian presidential candidate and tax and social justice campaigner, who framed his comments about efforts to bring back a ‘caring economy’ in Ecuador within the International Covenant of Economic, Social and Cultural Rights. Andres underlined how human rights depends on tax justice and debt justice to bring about the advancement of rights and curtailment of discriminatory policies.
Each year’s conference is marked by the Annual Lecture. This year we invited “a man known for standing with and for those who are perceived as weaker.” Dr Dereje Alemayehu, Executive Coordinator of the Global Alliance for Tax Justice, had a message that was clear and potent. Tensions between tax expertise and tax justice activism is a dynamic that “will always be there”. This is not a point of “discouragement” for activists. The focus of our activism is to mitigate the influence of past colonial powers and to address the “broken and outdated” global tax system they created. Politicking and power relations in the international arena determine our un-wellbeing and failure of rights. Dr Alemayehu warned that tax justice can’t be limited to technical solutions nor the notion that generating more revenue for countries represents justice – the 4 R’s of tax justice↪NOTEThe four “Rs” of tax refer to the key benefits that flow from taxation: Revenue, to fund public services, infrastructure and administration. Redistribution, to curb inequalities between individuals and between groups. Repricing, to limit public “bads” such as tobacco consumption and carbon emissions. Representation, to build healthier democratic processes, recognising that higher reliance of government spending on tax revenues is strongly linked to higher quality of governance and political representation. demand transparency, universality and equality. Delivered with characteristic compassion, Dr Alemayehu is clear that advancing human rights requires the creation of an organic link and alignment with the human rights movement in the struggle for justice.
On the final day there was a focus on the normative. Kate Donald moderated a session called ‘Going beyond the surface: translating human rights norms into concrete fiscal policy reforms’ and described the conference as a “milestone in bringing these issues [tax justice and human rights] together”. Kate shared encouraging examples of growing recognition of the fact that tax justice was crucial to the progress of rights, equality and sustainable development. Many more sessions also delved into normative approaches including a session on personal and political reflections on new constitutional developments to mitigate inequalities and strengthen rights in Chile.
It is fitting that this year’s spirited conference had a particularly animated conclusion. Pulling together a panel of legal, revenue, development and economic experts rooted in the global south, Irene Ovonji-Odida, lawyer, women’s rights activist, and UN High-Level Panelist, along with Logan Wort, Executive Secretary at the African Tax Administration Forum (ATAF), and Manuel F. Montes, Senior Advisor at the Society for International Development, considered what is next for the global taxing rights process, discussed how critical recommendations can be implemented to ensure tax justice and human rights are at the forefront of global policy making, and, crucially, reflected on the power imbalances and pressures that are imposed by the richest on the poorest.
Few can leave this conference without a sobering understanding of the powerful interests which tax justice and human rights campaigners, researchers and journalists are tackling head on. Their efforts to change structures and systems which fail the economic, social and cultural rights of peoples all over the world is exemplified in their courage, innovation, tenacity and hard graft. The realisation of rights is a collective struggle, as Jeannie Manipon said at the opening of the conference, to re-centre people and planet.
At this year’s conference we honoured the bravery and tenacity of one woman and her family. The Family of Daphne Caruana Galizia were awarded the Anderson-Lucas-Norman Award for Tax Justice Heroism. The award is named after Jean Anderson, Pat Lucas and Frank Norman, three Jersey islanders who were among the first to challenge the financial sector’s state capture of Jersey, sparking the global tax justice movement.
Daphne Caruana Galizia was a fearless investigative journalist. A native of Malta. She, like John Christensen, co-founder of the Tax Justice Network and native of the UK dependency Jersey, was driven by a sense of abhorrence towards the injustice that resulted from the self-interest, secrecy and illicit financial activity operating around her. Knowing that the patterns and scale of activity undermined democracy and the gulf between rich and poor, Caruana Galizia disrupted and frustrated the financially corrupt. She paid with her life. Her family honour her memory by continuing her investigative work and by bringing those responsible for her death to account. Their efforts are both a tribute to their mother, wife and sister, and to all investigative journalists who put themselves at risk.
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 Naomi Fowler speaks with Paul Caruana Galizia, one of the sons of Malta’s incredible investigative journalist and anti-corruption champion Daphne Caruana Galizia, who was assassinated in 2017. Paul Caruana Galizia discusses his mother’s legacy, the capture of Malta through an aggressive, over-sized finance sector with financial secrecy at its heart, and his hopes for the future.
You need to be very strong. To do the job that she did you really have to be your own person. You couldn’t be the kind of person who worries what people might think of you, And you really have to say, no, I’m not going to adapt, I’m not going to fall into that mould. I’m going to break it and keep breaking.”
~ Paul Caruana Galizia
The transcript is available here. (Some is automated and may not be 100% accurate)
The capture of Malta and the fight for justice #113
As mentioned in the show, here’s a video of the story of the ‘firestarters of the tax justice movement’ from the tax haven of Jersey:
A transcript of her edited keynote speech is available here.
You can subscribe to the Taxcast either by emailing naomi [at] taxjustice.net or find us on your podcast app.
Taxcast Extra: The Whiteness of Wealth (2)
You can download this podcast to listen offline here.
Regular listeners to our long-running monthly podcast the Taxcast will have heard episodes 102 and 103 where we looked at just some of the many complex issues around tax and race in the US and the UK context, the roots of structural racism and the lived experiences of people of colour today as citizens, taxpayers and economic actors.
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:
Semanas cruciales para el nuevo impuesto global para las grandes multinacionales.
La estrategia de los países en desarrollo para que se escuchen sus intereses en este nuevo impuesto internacional corporativo
Inflación global, ¿por qué los precios están subiendo en todo el mundo?
Y Chile, ¿podrá la asamblea constituyente lograr los cambios constitucionales que necesita el país?
Mathew Gbonjubola, Director de Política Fiscal de Nigeria
Jayati Ghosh, comisionada de la Comisión Independiente para la Reforma del Impuesto Corporativo Internacional ICRICT y profesora de Economía de la Universidad de Massachusetts
“Tax justice is a feminist issue. Tax is a human rights issue.”
Today the Tax Justice Network publishes a new report Tax Justice and human rights: The 4 Rs and the realisation of rights. The report focuses on two main bodies of argument. The first addresses the failure of tax and broader fiscal systems to deliver intersectional equality and human rights. The second highlights how those failures are caused by illicit financial flows and the actors and structures behind them. Together, these arguments provide the backbone of the case for tax justice to be understood fundamentally as a feminist issue and human rights issue. They support the recognition of human rights’ dependence on tax justice to deliver rights and intersectional equality.
Our report, written with contributions from researchers at the Universities of Leicester and St Andrews School of Medicine (GRADE) in the UK and presented at the annual Tax Justice Network conference today (6th July), models the impact that the $427 billion lost globally could have if it went to governments rather than tax havens. GRADE modelling tells us that if there were an increase in government revenue equivalent to the tax abuse, for countries where there is data available, the additional numbers accessing their fundamental human rights projected over a ten year period would be as follows:
• Sanitation – 34 million people. • Drinking water – 17 million people. • An additional year at school – 3 million children. • Mortality reduction – 600,000 children and 73,000 mothers.
This shocking analysis reinforces previous research acknowledging the importance of revenue to make a well-functioning, democratic and accountable government that fulfils its obligation as a duty bearer of human rights. It also underlines that while the absolute scale of revenue lost from tax abuse in high income countries is greater than in lower-income countries, smaller losses have a more profound impact on improving the rights of people in low income countries.
Women and girls who make up over half of the world’s global poor can therefore disproportionately benefit from increased access to sanitation and drinking water, and to additional years in education. Through progressive advancement of these ‘gatekeeper’ rights, women and girls – especially those most marginalised, gain increased opportunities for greater well-being and development.
Finally, the report calls for a shift in power. It recommends an urgent step change in the reform of global tax rules. Specifically, the report calls on governments to establish an ABC of tax transparency and to support the FACTI Panel recommendations for greater fiscal accountability and transparency. Pivotal to this is the establishment of a UN Tax Convention that will set international standards of transparency and cooperation, a UN intergovernmental body to set global tax rules and a decisive shift of power away from the OECD, the existing tax ‘rule setter’ and widely acknowledged as a ‘rich countries club’. The establishment of a Centre for Monitoring Taxing Rights is seen as crucial in analysing and understanding the impact of the scale and distribution of tax and to ensure that structurally and systemically the approach to policy reform is both gendered and intersectional and can support the advancement of the full range of human rights.
Welcome to the 43rd 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 for listeners to download. Any radio station is welcome to broadcast it for free and websites are also welcome to share it. You can join the programme on Facebook and on Twitter.
هل يحمي الحد الأدنى للأجور المصريين من التضخم؟
في حلقة هذا الشهر (# 43) من برنامج "الجباية ببساطة" ، نبدأ بتغطية آخر الأخبار المتعلقة بقضايا العدالة المالية على مستوى المنطقة العربية والعالم. في الجزء الثاني، كانت لنا مقابلة مع كريم مجاهد ، الباحث في الاقتصاد السياسي، ناقش فيها معركة تطبيق الحد الأدنى للأجور في مصر منذ عام 2011، ومدى إمكانية تطبيق القرار في القطاع الخاص بالإضافة لآثاره الاجتماعية والاقتصادية.
Pour l’Afrique, les pertes de ressources fiscales qui auraient pu renforcer les moyens de financer son développement, s’élèvent à 25,77 milliards $ chaque année, selon le rapport sur l’Etat de la Justice Fiscale (SOTJ) dans le monde publié par Tax Justice Network le 20 novembre 2020. Une réflexion et des campagnes sont menées tant au niveau de la région, que par des instances internationales, pour inverser la courbe et redonner une plus grande capacité financière aux gouvernements du monde entier, notamment ceux qui sont économiquement plus faibles. C’est dans cet ordre d’idée, qu’un Groupe de haut niveau sur la responsabilité financière internationale, la transparence et l’intégrité, connu sous le nom de Panel FACTI, a été mandaté le 2 mars 2020 par le 74e président de l’Assemblée générale des Nations Unies et le 75e président du Conseil économique et social pour réfléchir sur ces questions.
Le Panel FACTI a publié son rapport le 25 février 2021, dans lequel il formule une série de 14 recommandations. De manière générale, les différents points de revendication de la société civile internationale sont défendus par ce rapport. Par exemple, les objectifs de Tax Justice Network de promouvoir au niveau mondial des mesures telles que l’échange automatique d’informations, la communication d’informations financières pays par pays, la mise en place de cadres juridiques pour connaître les bénéficiaires effectifs et la mise en place d’un registre mondial complet des actifs sont pris en compte. Toutes les recommandations sont regroupées autour de trois pôles, comprenant les valeurs à mettre en œuvre, les politiques à entreprendre et les institutions qui accompagneront l’ensemble du processus. Elles plaident aussi pour l’adoption d’un modèle de convention fiscale international défini par les Nations Unies.
Ces recommandations du Panel FACTI reposent sur trois piliers, dont celui des valeurs, de la politique et des institutions qui seront au cœur de la réforme du système financier international. Pour ce qui est des valeurs, les pays et autres parties prenantes sont invités à faire preuve de plus de responsabilité, de légitimité, de transparence et de justice dans l’exécution des opérations financières. Par rapport à la politique, il est prescrit de mettre un accent sur l’identification des facilitateurs des FFI, l’inclusion de Société civile dans la recherche des solutions efficaces face au problème. Enfin le rapport plaide pour un cadre international de gestion de ce problème, avec un accent sur l’échange automatique des informations. Dans l’ensemble, la société civile africaine a accueilli favorablement ces recommandations. Certains, ont cependant émis de petites réserves sur le fait que le rapport de l’organe des Nations Unies ne donne pas une place plus importante au secteur du commerce international, qui est plus fondamental dans les flux financiers illicites en Afrique que l’économie numérique au cœur de l’attention des pays développés.
<< Les flux financiers illicites en Afrique proviennent principalement de trois sources. Blanchiment d’argent, flux financiers illicites fondés sur la fiscalité et enfin flux financiers illicites fondés sur le commerce. Selon le rapport du groupe de haut niveau de l’Union africaine Thabo Mbeki sur les flux financiers illicites en Afrique, la région est plus susceptible de souffrir des FFI à travers le commerce. Ce que nous constatons, c’est que ces questions étant à l’ordre du jour mondial, d’autres priorités sont maintenant mises en avant », a déclaré Chafik Ben Rouine, président de l’Observatoire de l’économie tunisienne, une organisation membre du réseau Tax Justice Network Africa, lors d’un récent échange entre les organisations de la société civile d’Afrique francophone et l’un des membres du Panel FACTI. L’Afrique ne rejette pas l’idée d’une taxation du digital. La question a d’ailleurs fait l’objet de discussion par ses experts, notamment dans le cadre de la conférence panafricaine sur les FFI Organisée par Tax Justice Network Africa en 2019.
Mais plusieurs parties prenantes de la région y compris la Commission Economique des Nations Unies pour l’Afrique, sont d’avis que les questions commerciales devraient être plus présentes, sur les débats internationaux, en matière de FFI. En effet, Selon un rapport de la Commission des Nations Unies sur le commerce et le développement (CNUCED) publié le 28 septembre 2020, l’Afrique a perdu chaque année 88,6 milliards de dollars entre 2010 et 2015 à travers la fuite de capitaux. Environ 40 milliards seraient liées au commerce. En ce sens, Tax Justice Network a développé des mesures de risques de flux financiers illicites via le commerce. La fuite des capitaux dans ce domaine peut prendre la forme de fraude fiscale à la douane, de surévaluation ou de sous-évaluation afin d’optimiser sa base fiscale ou de soustraire indûment des fonds à la corruption et au blanchiment d’argent. Outre les données sur le commerce des biens, les données sur les portefeuilles d’investissement publiées par le Fonds Monétaire International (FMI) sont également examinées, de même que celles de la Banque des Règlements Internationaux.
D’autres études sur les flux financiers illicites ont établi que l’Afrique se positionne comme une créancière nette du monde, et non la grande débitrice susceptible de constituer un risque pour ses investisseurs. Le rapport du Panel FACTI aborde également de manière pertinente la question des conventions fiscales en tant que source de flux financiers illicites, dans la mesure où elles sont parfois signées au détriment des pays les plus faibles. Mais cela ne semble pas lui donner une importance suffisante par rapport au rôle d’amplificateur de FFI que ces conventions ont dans le continent. Dans un rapport publié par le FMI en 2018, il est clair que les conventions fiscales dans plusieurs pays africains n’ont pas toujours permis d’attirer les investissements escomptés. Pourtant, des centaines de conventions fiscales avantageuses pour les pays riches continuent d’être en place en Afrique. Parmi les pays les plus agressifs du continent figurent la France, le Royaume-Uni, Maurice et les Émirats Arabes Unis.
Quelques possibilités en vue d’améliorer la situation actuelle
Ces considérations nous amènent à proposer une voie en avant pour une meilleure prise en compte des priorités des pays Africains dans le débat international concernant les flux financiers illicites.
Le rapport du Panel FACTI, dans le cadre de ses recommandations, suggère que la société civile soit impliquée dans l’élaboration des politiques internationales. Au niveau africain, les gouvernements devraient impliquer ces acteurs de manière obligatoire, lors de leurs discussions sur la fiscalité internationale, mais aussi dans la signature ou la gestion des conventions internationales, qu’elles soient fiscales ou commerciales.
Il serait également souhaité que les gouvernements africains, conformément à la recommandation du Panel FACTI sur la gouvernance nationale, créent une plus grande synergie entre les administrations fiscales, les douanes, les agences d’enquête financière et les banques centrales afin de mieux surveiller les flux financiers illicites à travers le commerce. Ces synergies permettraient d’améliorer l’efficacité des institutions, tout en permettant une meilleure qualité des données économiques permettant d’analyser ces flux.
Pour les sociétés civiles des pays africains qui ne disposent pas d’outils pour développer un plaidoyer solide, ainsi que pour les gouvernements en quête de mécanismes effectifs pour lutter contre l’évasion fiscale, et réaliser leurs ambitions de mobilisation de ressources, l’utilisation des solutions gratuites en ligne peut être décisive. En ce sens, Tax Justice Network dispose de plusieurs outils, tels que le Financial Secrecy Index, le CorporateTax Haven Index et le Illicit Financial Flows Vulnerability Tracker.
Whilst discussion and agreement on a global corporate minimum tax is historic, we consider it our job to challenge organisations like the OECD and to always push for better. We are sharing below our short statement on the OECD Inclusive Framework, supposed to be a space for all nations to contribute to developing tax standards and implementation.
But before that, it’s worth reading the Tax Justice Network’s Alex Cobham‘s thoughts which he shared on one of his famous long twitter threads:
OK, the OECD statement is out – and *now* it's clear why so many countries have expressed reservations. https://t.co/SiqWIXFSLB
Some commentators have been concerned about the risks of the very negative reactions to the OECD proposal, from a number of countries and groups, and from some activists – including us. Here’s another thread looking at the risks on each side:
If those of us who are fortunate enough to have a platform emphasise *only* the revenue grab of leading OECD members, and what that should mean for the legitimacy of the rich countries' club to set rules for the rest of the world, there is indeed a risk.
GLOBAL MINIMUM TAX CONFIRMED, BUT QUESTIONS GROW OVER OECD COMMITMENT TO ‘INCLUSIVE’ REFORMS
We note the statement from the Inclusive Framework, and the failure to acknowledge there the many countries that are known to have expressed serious reservations over the deal. After much speculation about concessions to lower-income countries, there is little progress here at all compared to the previous iteration.
‘Pillar 1’ remains a narrow reallocation only, of a small part of the global profits of the largest and most profitable 100 or so multinationals. Most countries, and especially lower-income countries, are unlikely to recoup the revenue they may lose from eliminating their DSTs if required to do so.
‘Pillar 2’, the global minimum corporate tax rate, remains of much greater importance, but deeply unfair. Even a rate as low as 15%, rightly decried by Argentina, by the Independent Commission for the Reform of International Corporate Taxation (ICRICT) and by many lower- and higher-income countries for the lack of ambition, could raise $275 billion of additional revenues if applied globally. That would make it the biggest change in tax rules for a century – but the G7 countries alone, with just 10% of the world’s population, would take more than 60% of those revenues.
Alex Cobham, chief executive of the Tax Justice Network, said:
“A higher effective global minimum tax rate, coupled with fairer distribution of the resulting revenues, would deliver greater benefits for almost every country – even including many of the OECD members which operate as corporate tax havens. But instead the OECD is forcing through a proposal that gives little to lower-income countries, and leaves much of the incentive for profit shifting intact.
“To force through such an unfair reform, giving the lion’s share of revenue to the largest OECD members when lower-income countries lose the greatest share of tax revenue to corporate tax abuse, is shocking. To do so during a global pandemic when the need for revenue to support public health, and economic recovery, is greater than ever, is unthinkable.
“The global minimum corporate tax rate can mark the beginning of the end of the race to bottom on corporate tax. But the OECD increasingly looks unable, or unwilling to deliver a fair and effective reform. Countries should take the opportunity to push ahead with their own reforms, and consider the possibility of future negotiations being held under UN auspices instead.”
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