The Tax Justice Network’s June 2019 Spanish language podcast: Justicia ImPositiva, nuestro podcast, junio 2019

Welcome to this month’s latest podcast and radio programme in Spanish 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 radiofónica! (abajo en Castellano.

In this month’s programme:

Guests:

En este programa:

Invitados:

Tax Justice Network acaba de publicar un nuevo índice de guaridas fiscales de las corporaciones. Encabezan el ranking las Islas Virgenes Británicas, las Bermudas y las islas Caiman. Y es muy interesante que una cosa que tienen en común estas tres jurisdicciones, además de ser guaridas fiscales, es que pertenecen a las llamadas dependencias de ultramar del Reino Unido. ¿Qué son las dependencias de ultramar del Reino Unido? Son uno de esos engendros jurídico-políticos de los británicos para mantener la soberanía final del territorio, pero alegando, cuando es conveniente, que no tienen potestad sobre lo que pasa allí.  En definitiva, es mío, pero no soy responsable.

~ Marcelo Justo, Justicia ImPositiva, edición 36

MÁS INFORMACIÓN:

El enlace de descarga para las emisoras: http://traffic.libsyn.com/j-impositiva/JI_junio_19.mp3

También para emisoras, el enlace de nuestro ‘trailer’: http://traffic.libsyn.com/j_impositiva/JI_Trail.mp3

Subscribase a nuestro canal de youtube en el playlist de Justicia ImPositiva aqui

Subscribase a nuestro RSS feed: http://j_impositiva.libsyn.com/rss

O envien un correo electronico a Naomi [@] taxjustice.net para ser incorporado a nuestra lista de suscriptores.

Sigannos por twitter en @J_ImPositiva

Y estamos en facebook

A boost for the UN Tax Committee

We’re sharing here an article from Abdul Muheet Chowdhary, who is a consultant in the Policy Planning and Research Division of the Ministry of External Affairs in India and formerly a consultant with the United Nations. The article originally appeared here on the blog of GLOBTAXGOV – A New Model of Global Governance in International Tax Law Making.

UN tax committee gets a boost through new working methods

By Abdul Muheet Chowdhary [Views expressed are personal.]

The UN this month published a document titled ‘Practices and Working Methods for the Committee Of Experts On International Cooperation In Tax Matters’. For those who believe that the UN should play a stronger role in the governance of international tax, this is a welcome development. The document further deepens the institutionalisation of the UN Committee of Experts on International Cooperation in Tax Matters (henceforth UN tax committee) by developing new working methods and making several clarifications. Some of these are welcome while others are problematic. Overall, it is clarified that the working methods must be read in conjunction with the rules of procedure of the United Nations Economic and Social Council (ECOSOC) and in the case of inconsistency, the ECOSOC rules are to prevail.

  1. Role of Observers

The most important aspect of the new working methods concerns the observers. Observers include both official delegations sent to represent a country as well as non-state actors such as business, academics and civil society. Observers play an influential role in the UN tax committee. One must only examine the composition of any of the sub-committees of the UN tax committee to see the large number of observers, especially from business and industry. As an example, the composition of the sub-committee on extractive industries can be seen here. It consists of two co-coordinators and has four member countries as participants, meaning six countries represented. However, it has thirty observers, with thirteen (nearly half) representing business. Observers influence the committee by arguing their case and are often invited by sub-committee coordinators to present papers and guidance notes. These documents play an agenda-setting role and even make their way into final policy documents such as model conventions, handbooks and guidebooks. This can at times be problematic because the coordinator can succumb to vested interests and call only certain organizations such as big business or oil and gas majors to present guidance notes and in this way prepare policy in their interest. The working methods have several provisions regarding the role of observers and given their importance these require careful scrutiny.

Throughout the working methods, great care has been taken to ensure that observers are involved and are given due voice. This is rather problematic and a double-edged sword. In the present context, the UN tax committee is possibly the sole global tax institution in which developing countries are in a majority (albeit wafer-thin) and can freely express themselves. In theory it is possible that observers will include a mix of interests, but a cursory examination of the existing observers in the sub-committees makes it clear that many of them represent developed country interests . Apart from the aforementioned example of the sub-committee on extractives, one can also refer to the composition of the sub-committee on transfer pricing, which as of this writing has nineteen observers, of which nine represent business and one represents the OECD. In such a context, excessively involving developed country voices through the route of ‘observers’ amounts to a browbeating of developing country voices. Nevertheless, it is welcome that now at least some rules have been developed where none earlier existed, enabling some checks and balances on abuse of power. They are examined as follows.

Part III of the working methods deal with closed consultations. Observers are allowed to take part in these and point 9 even clarifies that closed consultations ‘should not impede obtaining relevant input from Observers’! Point 12 further clarifies that scheduling of these closed consultations should account for the attendance of observers. It is not mentioned as to how precisely it will be decided which observers to involve in such a consultation and why.

Part V deals with conduct of business and point 23 states that ‘input or information from Observers or other stakeholders should be given appropriate consideration in the work of the Committee, especially where comments have been requested by the Committee.’ It is not clarified who in the Committee can request this information, why and whether it can be challenged or opposed. Point 24 adds that even if inputs have not been requested from Observers, these can still be forwarded to the Committee if the Secretariat and Chairperson deem it necessary. This gives the Chairperson significant power in agenda-setting. Points 48 allows for an Observer State participant to be a co-coordinator of a subcommittee. Thus, even non-members of the UN tax committee can now be co-coordinators, though this can take place only on an ‘exceptional basis’. Point 49 clarifies that observers can be sub-committee members, institutionalising a long-followed practice.

On the positive side, it has been clarified that observers do not get to vote, and that the committee may decide to limit participation in a sub-committee only to members or to members and observer states. This is welcome. Even more welcome is point 54 which states, ‘the composition of Subcommittees should include a majority of Members and State Observers unless, on a recommendation from the Coordinator of a particular Subcommittee, the Committee agrees to a different composition of the particular Subcommittee.’ Presently in many of the subcommittees the members are outnumbered by observers. As mentioned, observers usually represent developed country interests and limiting their participation will reduce the ‘drowning out’ of developing country voices. This is buttressed by point 20 which addresses this issue and seeks to rectify it by stating that members should speak first before the floor is given to observers. Point 55 adds that sub-committees should try and ensure regional diversity and developing country representation.

2. Role of Sub-Committees and Coordinators

After observers, the next most important aspect of the working methods relates to sub-committees and coordinators. A large chunk of the UN tax committee’s work is carried out through the sub-committees. These working methods for the first time spell out some rules that will now govern their functioning. Point 42 clarifies the relationship between subcommittees and the committee by stating that subcommittees make recommendations, but the final decision is to be taken by the committee. Point 43 specifies that any Member can propose the creation or abolition of a sub-committee though it is not specified whether its creation requires consensus or majority support. The working methods only mention ‘sufficient support’ which is ambiguous. The possibility for creating more ad-hoc bodies has been potentially increased by allowing for mandate-driven subcommittees. This is welcome as it potentially enables the UN tax committee to deal with a much broader range of issues. The coordinator plays a powerful role as s/he will determine which observers can participate in a subcommittee, though this has to be approved by the Committee. As per point 58, members can now oppose the addition or removal of an observer. This is welcome and allows for checks on unwelcome ‘stacking’ of subcommittees. Point 62 allows coordinators to involve ad hoc observers in a meeting, though there is no provision to put a check on this. This needs to be monitored as it is liable to abuse.

Points 64 and 65 importantly encourage conference calls and electronic means of communication to maximise participation while keeping a convenient time in mind. Travelling all the way to the UN is often expensive for developing country participants and this provision eases things.

3. Additional working methods

The Secretariat and the Chairperson have been given the power to determine the provisional agenda which has to be subsequently approved by the Committee. The Chairperson’s powers have been increased to summarise the conclusions reached by the Committee and alter timelines for certain decisions. Point 21 clarifies that one member has one vote and that only members can vote, adding that ‘consensus is desirable’. This probably will be ignored because in the committee voting is necessary to break the deadlocks that arise. Point 22 says that the Committee can take decisions even when not in session and lays out the procedure for doing so. This can increase its productivity given that it has only two sessions in a year. The working methods contain some other details on procedures for approving documents.

Conclusion

The working methods are a boost to the UN tax committee’s overall functioning as it clarifies the powers and functions of various actors and creates new procedures to streamline and increase the committee’s efficiency. The new rules are largely beneficial and can limit the undue influence of outside actors such as observers, increase productivity by allowing decision making outside sessions and create ad-hoc committees to deal with a wider range of issues.

There are several unanswered questions, however. It needs to be clarified:

(1) how will it be decided which observers to invite for closed consultations,

(2) who in the Committee can request inputs from observers and whether there is any option to block such a request,

(3) whether Committee members can override the Chairperson if s/he decides to invite inputs from observers which are deemed unnecessary or unwarranted,

(4) what exactly the ‘exceptional basis’ is on which observers can be made sub-committee co-coordinators,

(5) what extent of support is needed for a Member’s proposal to create or abolish a sub-committee and

(6) whether it is possible to regulate the involvement of ad-hoc observers in sub-committee meetings.

It is hoped that future rules will fill these gaps. Such refinement of institutional rules will continue to strengthen the UN tax committee on its journey towards being a genuinely representative global tax authority.

Job vacancy: Operations Associate

We’re hiring again! Details of the new Operations Associate role below, and job information pack to download here.

Key facts:

Application closing date: Sunday 7 July 2019
Start date: Monday 2 September 2019
Reports to: Director of Operations
Contract: Permanent
Hours: Between 15 and 22 hours per week (spread over three to five days per week)
Salary: £26,000 pro rata (£10,400 to £15,600 per annum, based on hours worked)
Location: Home-based (anywhere in the world, subject to contracting requirements)

Role description

Supported by a major five-year grant from the Ford Foundation, and grants from other funders including Norad and the Adessium Foundation, the Tax Justice Network is in a period of growth and transition, with a focus on institutional strengthening – building systems and capabilities to enable and support growth and impact through our ambitious five-year strategic programme. TJN is a virtual organisation, with staff working from home across multiple countries and continents, although its legal base (and that of many employees) is in the UK.

The Operations Associate is a new post, created to support this institutional strengthening process by working with the Director of Operations to build, manage and run a set of key systems and processes covering a range of organisational capabilities, including IT, HR, grant management, events, finance and monitoring, evaluation and learning. The post will also provide some administrative support to TJN’s Chief Executive.

We are looking for someone who is genuinely enthusiastic about building systems and processes to make a brilliant organisation even more effective and efficient. This is an amazing opportunity for someone with excellent IT skills, motivation and organisation, as well as very strong interpersonal and team skills, to help a small but rapidly growing organisation, which already punches well above its weight on the global stage, to get to the next stage in its growth. This is not primarily an ‘administrative’ role, although there is some administration involved; it is, above all, about identifying and exploiting opportunities to make improvements to the ways in which we work together so that we can make the best use of our limited resources.

We are flexible about where in the world the postholder is located (and in which time zone), subject to the need to find a contracting arrangement that meets all applicable compliance requirements. We are also flexible about time commitments; we are looking for someone who can work for between 15 and 22 hours per week (between 40% and 60%), as long as the hours worked are spread over at least three days per week (ideally not consecutive days).

Responsibilities

Person specification

Skills

Attributes

How to apply

Please upload a CV and answer a series of questions (addressing the skills listed in the person specification as well as your motivation) at www.taxjustice.net/oa by Sunday 7 July 2019 at 23.59 GMT. You do not need to address the attributes; these will be explored at interview. We anticipate that first round interviews will be held between 11 and 19 July, by remote video link (Zoom). For an informal discussion about the role, contact Will Snell, Director of Operations, on will AT taxjustice.net.

Twenty reasons to shrink your financial centre

(Cross-posted with financecurse.net)

The Finance Curse is a concept first developed by the Tax Justice Network. It is a relatively simple idea — and also an original and powerful multi-level critique of the modern global economy.

The core message is “too much finance can make a country poorer,” and this article explains why this is so, by framing the issue in simple terms. (It complements this page showing over 20 academic studies which support the proposition that “too much finance can make you poorer.”)

All this has geographical, racial, gender, and disability-based implications, as laid out here.

Continue reading “Twenty reasons to shrink your financial centre” →

Whistleblower Rudolf Elmer: legal opinion on latest ruling

We’ve written many times about Swiss whistleblower Rudolf Elmer’s long legal battles against Swiss banking secrecy here, here, here here and here. He’s endured 48 prosecutorial interrogations, 6 months in solitary confinement and 70 court rulings. Of one thing you can be sure – if the Swiss bank he worked for and the Swiss authorities thought it’d be easy to defend banking secrecy and the terrible harm it does, they picked the wrong person to fight. There are those who would have you believe that Swiss banking secrecy is over, but we can assure you that’s far from the case. Switzerland is still ranked number one in our Financial Secrecy Index. Let’s see how it does in our next assessment, due in 2020.

We wrote about the latest court case here. We’re now able to share with you below a detailed legal commentary on this 14-year judicial and media scandal, but that wasn’t possible until Rudolf Elmer had received (in February 2019) the 46-page verdict from the Swiss Federal Supreme Court on its decision of October 10th 2018, where after a public hearing before judges (lasting 150 minutes – without the parties present) the criminal chamber of the Federal Court delivered a groundbreaking judgment in the case of Rudolf Elmer regarding violation of bank secrecy, and other matters by 3 votes to 2. Most importantly, the charge of violation of Swiss bank secrecy alleged against Elmer brought by the Higher Prosecution Office of the Canton of Zurich was rejected by the Federal court and the acquittal of Rudolf Elmer by the High Court of the Canton of Zurich was confirmed.

The Federal Court also upheld the complaint by Rudolf Elmer concerning the imposition of an advance payment for the release of confiscated data and documents as well as the modalities for the return of the personal data of the Elmer family. His complaint against the imposition of three-quarters of the costs of the case, including the investigation costs, in the amount of CHF 320,000, and against the penalty for convictions for document forgery and threatening behaviour, were rejected by the Federal court.

Aspects of the case will continue to the European Court of Human Rights but in the meantime here’s an essay by Swiss law professor Dr Werner Kallenberger, written here in German and also translated into English and available here. He writes that:

“The internationally known, disparaged trial with irresponsibly high material and immaterial completely unnecessary costs could and should have been avoided if the public prosecutor’s offices and courts concerned of the state of Zurich…had correctly adhered to governing laws, doctrine and jurisdiction.

If the public prosecutor’s office in charge of this case and the courts of Zürich had, from the first day of the investigation July 27, 2005, not acted irresponsibly, but had correctly adhered to the governing laws, doctrine and jurisdiction, much of the costs could have been avoided.”

Read on here.

Edition 17 of the Tax Justice Network Arabic monthly podcast/radio show, 17# الجباية ببساطة

Welcome to the seventeenth edition of our monthly Arabic podcast/radio show Taxes Simply الجباية ببساطة contributing to tax justice public debate around the world. (In Arabic below) Taxes Simply الجباية ببساطة is produced and presented by Walid Ben Rhouma and Osama Diab of the Egyptian Initiative for Personal Rights, also an investigative journalist. The programme is available for listeners to download and it’s also available for free to any radio stations who would like to broadcast it. You can also join the programme on Facebook and on Twitter.

Taxes Simply #17 – The New Corporate Tax Haven Index. Plus, we analyse the Moroccan National Dialogue on Taxes

الجباية ببساطة #١٧ – مؤشر جديد للملاذات الضريبية وتحليل المناظرة الوطنية حول الجبايات في المغرب

أهلا بكم في العدد السابع عشر من الجباية ببساطة. نبدأ العدد كالعادة بأهم أخبار الضرائب والاقتصاد في شهر مايو/آيار من المنطقة والعالم. تضم أخبارنا المتفرقة: ١) تأجيل نشر بحث الدخل والإنفاق الرسمي في مصر لعدم توافقه مع ما تعتبره الدولة إنجازات؛ ٢) بريتش أمريكان توباكو تحول نحو مليار دولار من دول منخفضة ومتوسطة الدخل لمكتبها في المملكة المتحدة؛ ٣) اتفاقية التجارة الحرة القارية الأفريقية تدخل حيز التنفيذ؛ ٤)  الكويت تناقش فرض ضرائب بنسبة ٥% على تحويلات العاملين الأجانب.

أما في الجزء الثاني، قام وليد بن رحومة بمحاورة الاقتصادي المغربي نجيب أقصبي حول المناظرة الوطنية الثالثة حول الجبايات في المغرب التي تهدف لإصلاح النظام الضريبي المغربي ليصبح أداة تدعم العدالة الإجتماعية.

في الجزء الثالث والأخير  من البرنامج، يلقي وليد بن رحومة وأسامة دياب الضوء على مؤشر الملاذات الضريبية للشركات الصادر حديثا عن شبكة العدالة الضريبية، والذي يصنف الدول حسب مساهمتهم في مخاطر التجنب الضريبي على مستوى العالم. حدد المؤشر أربع دول تزيد مساهمتهم في تعزيز أنظمة التجنب الضريبي على مستوى العالم، وهم الدول التي يصفها المؤشر ب”محور التجنب”.

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

Edition #4 of the Tax Justice Network’s Francophone podcast/radio show: #4 édition de radio/podcast Francophone par Tax Justice Network

We’re pleased to share the fourth edition of the Tax Justice Network’s new monthly podcast/radio show for francophone Africa by finance journalist Idriss Linge in Cameroon. The podcast is called Impôts et Justice Sociale, ‘tax and social justice.’ It’s available for anyone who wants to listen to it, and, as is the case with all our monthly podcasts, (Spanish, Arabic, English and Portuguese), it’s free to broadcast for any radio station that wishes to broadcast it. Our French language podcast aims to contribute to ideas and debates on tax justice and social justice in the region. Details of this month’s episode are below.

Nous sommes heureux de partager avec vous cette 4ème émission  radio / podcast du Réseau Tax Justice, Tax Justice Network produite en Afrique francophone par le journaliste financier Idriss Linge basé au Cameroun. Le podcast s’appelle Impôts et Justice Sociale. Il est disponible pour tous ceux qui veulent l’écouter et, comme tous nos podcasts mensuels (espagnol, arabe, portugais et anglais), il est gratuit à diffuser pour toute station de radio qui souhaite le diffuser. Ce podcast en langue française vise à susciter des idées et des débats sur la justice fiscale et la justice sociale à de nouveaux publics. Nous partageons ci-dessous le tout premier épisode de ce mois-ci, suivi d’un communiqué de presse avec tous les détails sur le suivi de l’émission et où le trouver.

Cette 4ème édition du podcast francophone du réseau pour la justice fiscale (Tax Justice Network) aborde deux sujets essentiels:

Le premier est celui de la justice fiscale et du genre. A travers des échanges menés avec des femmes vendeuses dans des marchés et des femmes leaders présentes au Cameroun (Afrique Centrale), nous avons confirmé les hypothèses de plusieurs études publiées par International Center on Tax and Development

Le deuxième thème concerne la publication par Tax Justice Network de son Corporate Tax Haven Index, l’indice de paradis fiscale pour les entreprises. Nous y avons découvert des résultats assez surprenants, et nous confirmons surtout que les gouvernements de France et de Grande Bretagne, sont les plus agressif en matière de fiscalité avantageuse au profit de leurs entreprises, mais au détriment des pays qui sont leurs partenaires commerciaux.
Comme invité, nous avons reçu Lucas Millán Narotzky, il est chercheur chez Tax Justice Network, et a travaillé sur la Méthodologie et l’Analyse du Corporate Tax Haven Index:

“Même si le Royaume-Uni est au 13ème poste du ranking, quatre dépendances et territoires britanniques sont en tête d’index : Jersey, Bermuda, les Iles Cayman, et les Iles Vierges Britanniques. Même si ces territoires dépendent légalement du Royaume Uni, ce dernier à toujours refusé d’imposer des changements définitifs dans ces paradis fiscaux, qui sont en quelque sorte une extension de la finance du Royaume Uni”

Voulez-vous télécharger et écouter sur la route ?

Téléchargez sur votre téléphone ou votre appareil portable en cliquant sur “enregistrer le lien” ou “télécharger le lien” ici.

Connectez-vous à nous!

Voulez-vous vous abonner ? Abonnez-vous par courrier électronique en contactant le producteur [email protected] OU abonnez-vous à notre chaîne youtube

Notre page facebook

Notre Twitter

Our new tax justice monthly podcast in Portuguese: nosso novo podcast em português

The Tax Justice Network now speaks tax justice in five languages on radio stations and podcast platforms across the world, all with their own unique content and style – English, Spanish, French, Arabic and now Portuguese. So, welcome to our brand new monthly tax justice podcast/radio show in Portuguese. Bem vindas e bem vindos ao É da sua conta, nosso novo podcast em português, o podcast mensal da Tax Justice Network, Rede de Justiça Fiscal. Veja abaixo os detalhes do programa em português.

É da sua conta is produced by Daniela Stefano, Grazielle David and Luciano Máximo and coordinated by Naomi Fowler. The programme is free to download and for broadcast by any radio station around the globe that wants it. Contact us on [email protected]

In the May 2019 podcast É da sua conta #1:

Also featuring:



Podcast É da sua conta #1: o aumento da pobreza no Brasil e no mundo e como a política fiscal pode ser um caminho para sua redução

Bem vindas e bem vindos à edição de estreia do É da sua conta, podcast mensal em português da Tax Justice Network, com produção de Daniela Stefano, Grazielle David e Luciano Máximo e coordenação de Naomi Fowler.

O download do programa é gratuito e a reprodução é livre para rádios no Brasil e em todos os países lusófonos ou em qualquer parte do mundo e quer entender a relação entre justiça fiscal e o seu dia a dia.

No É da sua conta #1, de maio de 2019, você confere:

Outros participantes:

Mais informações:

Download do podcast aqui
Nosso canal no Youtube
Inscreva-se: [email protected]
Twitter
Facebook

The UAE and Mauritius are the most corrosive corporate tax havens against African countries – Tax Justice Network Africa

Following the Tax Justice Network’s publication of the Corporate Tax Haven Index earlier this week, Tax Justice Network Africa released the following statement highlighting the damage wrought by corporate tax havens on African countries.

Press Release – UAE and Mauritius are the most corrosive corporate tax havens against African countries – Tax Justice Network Africa

Study reveals capture of tax rights in low income countries

Nairobi May 29, 2019, The Corporate Tax Haven Index (CTHI) by Tax Justice Network launched yesterday shows how the United Arab Emirates (UAE) and Mauritius are among the most corrosive corporate tax havens against African countries. Kenya and Mauritius signed a Double Taxation Avoidance Agreement (DTAA) in May 2012 which Tax Justice Network Africa (TJNA) successfully challenged in the Kenyan high court. The CTHI reinforces the importance of the Kenya High Court rulingthat declared the Kenya-Mauritius treaty null and void by demonstrating the dangers of DTAA signed with tax havens such as Mauritius and UAE in facilitating aggressive tax avoidance resulting to significant revenue loss for many African countries.

The study reveals the nature of secretive tax havens behind failure of the global corporate tax system. CTHI identifies a global network of countries whose jurisdictions are most responsible for aggressively undermining the ability of governments across the world to meaningfully tax multinational corporations (MNC). An estimated $500 billion in corporate tax is dodged each year globally by multinational corporations.

The CTHI shows an aggressive dispossession of low-income countries’ tax rights spearheaded by the United Arab Emirates (UAE), the UK and France who take advantage of minimal if not non-existent transparency, systemic loopholes and non-implementation of anti-avoidance mechanisms. Of the 64 countries examined from around the world 9 African countries namely; Botswana, Gambia, Ghana, Kenya, Liberia, Mauritius, Seychelles, South Africa and Tanzania, the CTHI revealed weak tax systems that are constantly exploited resulting to illicit financial flows (IFFs). Specific to Africa, the UAE and Mauritius, are the continent’s most aggressive countries in terms of driving down the withholding tax rates of countries’ through treaties. Many African countries are increasingly opening themselves to such exploitation. For instance, in April 2019 President Uhuru Kenyatta re-signed a DTAA with Mauritius creating a legal conundrum over the treaty, soon after the court ruling invalidated an earlier agreement following TJNA’s petition.

Mr Alvin Mosioma the Executive Director of TJNA said:

It is unacceptable that the Kenyan government is shifting the burden of taxation to the ordinary citizen, while deliberately opening doors for the wealthy elite and unscrupulous MNCs to evade and avoid taxes through DTAAs with secretive tax havens. As confirmed by the recent IMF study and contrary to popular claims, DTAAs signed by African countries with tax havens do not lead to increased investments.

Similar to the High Court ruling, this study underscores the position that DTAAs are often abused and provide loopholes for tax avoidance practices taking away revenues these countries direly need to finance their government programmes.

TJNA affirms its demand that the Government of Kenya and other African Governments should review the old and outdated DTAAs particularly with tax havens including those with UAE, Netherlands, and Mauritius and ensure that those currently under negotiation do not undermine domestic resource mobilisation efforts.

Efforts by African countries to address poverty and achieve sustainable development goals will remain a mirage if these countries do not stem Illicit financial flows and invest in building equitable tax systems

said Mr Mosioma

For more information please contact Cynthia Umurungi on [email protected]

Transforming local economies: the Preston Model – a Taxcast special edition, May 2019

In this special extended edition of the May 2019 Taxcast we go to Preston in the North of England to see the Preston Model in action and how they’re transforming their local economy and democratising wealth. Also:

“We needed a new economic model. It was obvious that we needed something new and different and radical, based upon the economic crash of 2008 which affected us quite badly. That wealth extraction, that straight-jacket that we’re in, we want to tackle by offering an alternative…So, you’re getting that virtual cycle of keeping wealth in the community and democratising the wealth as well, and democratising the economy. We are actually bringing that democracy back. And let’s compete with the big banks. If people get educated I think we could create some kind of really strong movement.”


Preston City Council Leader Matthew Brown

Featuring:

Want to download and listen on the go? Download onto your phone or hand held device by clicking ‘save link’ or ‘download link’ here.

Want more Taxcasts? The full playlist is here and here. Or here.

Want to subscribe? Subscribe via email by contacting the Taxcast producer on naomi [at] taxjustice.net OR subscribe to the Taxcast RSS feed here OR subscribe to our youtube channel, Tax Justice TV OR find us on Acast, Spotify, iTunes or Stitcher.

Join us on facebook and get our blogs into your feed

Follow Naomi Fowler John Christensen, The Taxcast and the Tax Justice Network on Twitter.

Watch this short video on Mondragon’s cooperative model

Further Reading:

https://cles.org.uk/tag/the-preston-model/

https://www.theguardian.com/commentisfree/2019/mar/06/brutal-cuts-fight-back-preston-dragons-den

https://www.theguardian.com/commentisfree/2018/jan/31/preston-hit-rock-bottom-took-back-control

https://www.theatlantic.com/international/archive/2019/05/british-town-local-economy/588943/?utm_term=2019-05-13T19%3A46%3A16&utm_medium=social&utm_campaign=the-atlantic&utm_source=twitter&utm_content=edit-promo

https://www.local.gov.uk/sites/default/files/documents/5.40_01_Finance%20publication_WEB_0.pdf

Press kit – Corporate Tax Haven Index 2019

Embargoed: 18:00 CEST 28 May 2019

Please find the research and resources below. All content, resources and information provided and linked to on this page are strictly embargoed for 18:00 CEST 28 May 2019.

For any enquiries, please contact [email protected].

No, corporate tax avoidance is not ‘legal’

The original version was published at Financial Times Alphaville here. This version was updated on Sept 5th, 2019, responding to media comments. Scroll down to the bottom to see the new material.

Update: Taxwatch in the UK has written a useful follow-up article entitled “Is Tax Avoidance legal?,” with the same conslusion, drawing on overlapping but often different arguments.

Continue reading “No, corporate tax avoidance is not ‘legal’” →

Quote of the day: the Big Four in low income countries

This quote is from an experienced African tax official, recently told to the Tax Justice Network. The interview was given on condition of anonymity.

Officials from the African tax authority became aware that the Big Four accounting firms had been telling multinationals operating in the country that the revenue authority was “completely unapproachable.” But when they made contact directly, not mediated through the Big Four firm, the picture changed:

When we all got around the table they realised we weren’t monsters. They told us, ‘we didn’t think that you people actually listen.’

Once we went straight to the MNE, [Multinational Enterprise] it went much faster. The person causing the problem was the intermediary. They are trying to position themselves as the broker to business, as if they don’t have an interest.”

It’s hardly a surprise. Just saying. And it’s certainly happening in rich countries too.

For more on this topic, please click here.

The Tax Justice Network’s May 2019 Spanish language podcast: Justicia ImPositiva, nuestro podcast, mayo 2019

Welcome to this month’s latest podcast and radio programme in Spanish 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 radiofónica! (abajo en Castellano.

In this month’s programme:

Guests:

En este programa de mayo de 2019:

INVITADOS:

MÁS INFORMACIÓN:

El enlace de descarga para las emisoras: http://traffic.libsyn.com/j-impositiva/JI_mayo_19.mp3

También para emisoras, el enlace de nuestro ‘trailer’: http://traffic.libsyn.com/j_impositiva/JI_Trail.mp3

Subscribase a nuestro canal de youtube en el playlist de Justicia ImPositiva aqui

Subscribase a nuestro RSS feed: http://j_impositiva.libsyn.com/rss

O envien un correo electronico a Naomi [@] taxjustice.net para ser incorporado a nuestra lista de suscriptores.

Sigannos por twitter en @J_ImPositiva

Y estamos en facebook

Job vacancy: Network and Partner Relations Coordinator

We’re hiring again! Details of the new Network and Partner Relations Coordinator role below, and job information pack to download here.

Key facts:

Application closing date: Sunday 2 June 2019
Start date: July/August 2019
Reports to: Director of Operations
Hours: Full time (37.5 hours per week), will consider part time or job share
Salary: £42,000 plus 12% pension contribution
Location: Home-based (anywhere in the world) with 10% overseas travel

Role description

The Network and Partner Relations Coordinator role is a new post that has been created to lead on consultation, collaboration and communication between the Tax Justice Network and national and regional networks in the tax justice movement. The Tax Justice Network has identified a need to take a more proactive leadership role on tax justice research and policy, investing resources in consultation, collaboration and communication, and complementing the role of the Global Alliance for Tax Justice in leading and coordinating global civil society advocacy and campaigning work on tax justice issues.

This role is about building and managing a set of key relationships that are fundamental to the continued impact of the global tax justice movement. We are looking for a confident and engaging networker who combines good political instincts with excellent interpersonal skills and emotional intelligence. We are not looking for a technical expert, but the postholder will need to have (or acquire rapidly) enough understanding of tax justice issues (and their relationship with inequalities, including gender inequalities and related intersectionality) to be able to co-ordinate research, policy and advocacy positions on complex issues effectively and credibly with partners and to be able to recognise or anticipate and then respond to any potential causes of conflict or disagreement related to them.

The role will involve a reasonable amount of global travel (perhaps 10%) so that the postholder can represent the Tax Justice Network at international conferences and events and at one-to-one or group meetings with current and prospective partner organisations. However, we expect that the vast majority of these meetings will take place virtually, in line with our aims to minimise our carbon footprint as well as logistical and budgetary considerations. The postholder should be willing to work flexibly, which will mean having considerable autonomy over working hours and patterns while recognising the occasional need to work unusual hours, for example to participate in calls with other time zones or to travel at weekends (with time off in lieu afterwards). The postholder will be prepared and able to work effectively from home and will need a reliable and fast internet connection.

Key responsibilities

Person specification

Experience

Skills

Attributes

How to apply

Please upload a CV (resume) and answer a series of questions, addressing the experience listed in the person specification as well as your motivation, at https://taxjustice.net/nprc by Sunday 2 June at 23.59 GMT.

Global Asset Registry workshop – 1-2 July, Paris: submit your paper

The Global Asset Registry workshop in Paris on July 1st and 2nd, 2019 is by invitation only. We will of course share the fruits of the workshop as we develop them further, but for now participation during Day 1 is open to anyone whose paper has been accepted.

You can submit your proposal and original, high-quality papers to present at the Global Asset Registry workshop using this online form.

Please send these by May 15, 2019 on the following issues to be discussed on Day 1:

We’re looking forward to hearing from you!

With support from

Edition 16 of the Tax Justice Network Arabic monthly podcast/radio show, 16# الجباية ببساطة

Welcome to the sixteenth edition of our monthly Arabic podcast/radio show Taxes Simply الجباية ببساطة contributing to tax justice public debate around the world. (In Arabic below) Taxes Simply الجباية ببساطة is produced and presented by Walid Ben Rhouma and Osama Diab of the Egyptian Initiative for Personal Rights, also an investigative journalist. The programme is available for listeners to download and it’s also available for free to any radio stations who would like to broadcast it. You can also join the programme on Facebook and on Twitter.

Taxes Simply #16: “Larger than is seen: social perception of economic crises” – the fault-lines of national inflation rates

Welcome to the April edition of Taxes Simply. In this edition, we begin with our news roundup of the most important tax news from the region and the world, including: 1) the arrest of Abraj Capital founder in London on charges of fraud 2) Yet another Spanish player is accused of tax fraud using offshore structures 3) Taxes represent only 7% of GDP in MENA countries, of which 70% are indirect taxes 4) And, the US congress asks – how do we tax cryptocurrencies?

In the second section of the podcast, Walid Ben Rhouma interviews Mohamed Sultan, the Egyptian economics researcher, about his recent book titled “Larger than is seen: the social perception of economic crises”. In the book, Sultan discusses the problems related to national inflation rates and how they fail to show the disparity of inflation rates for different categories of the population.

الجباية ببساطة #١٦ – كتاب “أكبر من أن تُرى”: خطايا مؤشرات التضخم الوطنية

مرحبا بكم في عدد شهر أبريل/نيسان ٢٠١٩ من الجباية البساطة. في هذا العدد نبدأ كالعادة بملخص لأهم أخبار الضرائب والاقتصاد من حول العالم. تشمل أخبارنا المتفرقة: ١) القبض على مؤسس شركة أبراج كابيتال الإماراتية في لندن بتهمة الاحتيال؛ ٢) اتهام لاعب جديد بالتحايل الضريبي في إسبانيا باستخدام شركات أوف شور؛ ٣) الضرائب في الشرق الأوسط تمثل ٧٪ فقط من الناتج المحلي الإجمالي وتشكل الضرائب غير المباشرة (وبالتالي غير العادلة) أغلبها؛ ٤) الكونجرس يتساءل كيف نتعامل مع العملات الكريبتو رقميا.

في القسم الثاني من البرنامج يجري وليد بن رحومة حوارا مع الباحث الاقتصادي المصري محمد سلطان حول كتابه الأخير الصادر عن دار المرايا للإنتاج الثقافي ومدى مصر بعنوان ” أكبر من أن تُرى: عن الإدراك الاجتماعي للأزمات الاقتصادية”، وفيه يتناول سلطان المشاكل المتعلقة بمؤشرات التضخم الوطنية وكيف أنها تفشل في إظهار التفاوت بين معدلات التضخم التي تختبرها الفئات المختلفة في المجتمع، ولا تمثل أكثر من فئة صغيرة جدا من السكان. https://www.goodreads.com/book/show/44313018

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

The use of banking information to tackle corruption and money laundering: a low-hanging fruit the OECD refuses to harvest

Imagine that the OECD set up a global system of rules for exchanging apples across borders, so that everyone can enjoy apples of different tastes. Apple eaters were delighted. But then someone asked if the apples could be used to make apple juice. “Stop!” the OECD said. “The apples are only authorised for eating, not drinking!”

Fiction? Yes – although if you replace ‘apples’ with ‘information’ then we are back in the real world. Specifically, information that is exchanged between countries under an OECD-led system to stop billionaires, criminals and assorted miscreants from hiding their money in tax havens to escape tax. The problem is, crime-fighters and agencies tackling money laundering or corruption could also use this information that tax authorities are getting access to – but the OECD, in general terms, won’t let this happen.

This situation is ridiculous – and it must change, urgently.

In the OECD’s defense, it’s true that the automatic system was designed to help tax authorities tackle tax issues. But if by serendipity we realise that foreign banking data is also relevant to fighting corruption and money laundering, why not allow this extra use?

The response is that tax authorities cannot share their information, even if they wanted to: information they have is bound by ‘fiscal secrecy’ that cannot be accessed without a court order. That may make sense in relation to disclosing information held by tax authorities to the wider public, but why not share it with other government authorities? The ridiculous underlying assumption here is that all employees of tax agencies are automatically fully honest, compliant with confidentiality and unable to leak or misuse information. Other agencies are full of leakers, crooks and ne’er do wells.

The real reason, is of course, different, and much more political. Information is power. And as we have explained here, governments have very clear incentives. Regardless of politicians’ wonderful speeches and claims about ending illicit financial flows and achieving world peace, tax authorities collect money (tax revenue), while anti-corruption agencies and financial intelligence units can create problems: they may dig into an administration’s dirt (such as the financing of political parties,) and uncover unsavoury friends of the politicians, or the politicians themselves. Drugs money and other ill-gotten funds may be invigorating the real estate market, so (whisper it quietly) unfortunately fighting tax evasion (which increases money for the government) seems to have a higher value for politicians than fighting corruption and money laundering, which may pull money out of real estate and other sectors. In short, we like the (dirty) money.

But beyond the arguments, there are a set of other obstacles to bear in mind.

Legal obstacles

Automatic exchange of banking information based on the OECD’s Common Reporting Standard (CRS) requires countries to have a treaty that allows exchanges of information, and another treaty to establish when, how and what information will actually be exchanged.

The first treaty is the Multilateral Convention on Administrative Assistance in Tax Matters (the Convention). The second one, which determines the scope and process to exchange information, is the famous Multilateral Competent Authority Agreement (MCAA).

The MCAA has the following obstacles in the recitals preventing the use of information beyond tax purposes (eg to fight corruption and money laundering):

Whereas, Chapter III of the Convention authorises the exchange of information for tax purposes, including the exchange of information on an automatic basis, and allows the competent authorities of the Jurisdictions to agree the scope and modalities of such automatic exchanges;

Whereas, the Jurisdictions have, or are expected to have, in place by the time the first exchange takes place (i) appropriate safeguards to ensure that the information received pursuant to this Agreement remains confidential and is used solely for the purposes set out in the Convention, and…

…

Section 5. Confidentiality and Data Safeguards

1. All information exchanged is subject to the confidentiality rules and other safeguards provided for in the Convention, including the provisions limiting the use of the information exchanged and,…
(emphasis added)

The Multilateral Convention on Administrative Assistance in Tax Matters has its problems too:

Chapter III. Article 4 – General provision

1. The Parties shall exchange any information, in particular as provided in this section, that is foreseeably relevant for the administration or enforcement of their domestic laws concerning the taxes covered by this Convention.

Art. 22 – Secrecy

2. Such information shall in any case be disclosed only to persons or authorities (including courts and administrative or supervisory bodies) concerned with the assessment, collection or recovery of, the enforcement or prosecution in respect of, or the determination of appeals in relation to, taxes of that Party, or the oversight of the above. Only the persons or authorities mentioned above may use the information and then only for such purposes. They may, notwithstanding the provisions of paragraph 1, disclose it in public court proceedings or in judicial decisions relating to such taxes. (emphasis added)

A light at the end of the tunnel

Not everything is lost. The Convention (which serves as the legal basis for the MCAA) does open a window in the same restrictive article 22:

Article 22 – Secrecy

4. Notwithstanding the provisions of paragraphs 1, 2 and 3, information received by a Party may be used for other purposes when such information may be used for such other purposes under the laws of the supplying Party and the competent authority of that Party authorises such use. Information provided by a Party to another Party may be transmitted by the latter to a third Party, subject to prior authorisation by the competent authority of the first-mentioned Party.

In other words, banking information may be used for other purposes, eg to tackle corruption and money laundering if:

  1. The country receiving banking data allows this type of information to be used to tackle corruption and money laundering under its domestic laws; and
  2. The country sending information allows the recipient country to use banking data for this purpose.

Two failed attempts

The Tax Justice Network had warned about this loophole on the constraints to use information back in 2014 (see #34). In 2016 together with the Financial Transparency Coalition we drafted a declaration (and sent it to the OECD) for all countries to sign. The declaration proposed that the countries who signed it would allow the banking information they sent to be used to tackle corruption and money laundering (to tick the second requirement mentioned above). Unfortunately our draft declaration never saw the light of day.

We got our hopes back, in November of 2018 when the OECD’s Global Forum published the Punta del Este Declaration, which stated:

4. We encourage all Latin American countries to further strengthen their efforts in tackling cross-border tax evasion, corruption and other financial crimes through closer cooperation, both at the global and regional levels, including in particular through more intense use of all the available exchange of information tools for the purpose of deterring, detecting and prosecuting tax evaders;

(…)

6. We will consider the possibility of (i) wider use of the information provided through exchange of tax information channels for other law enforcement purposes as permitted under the multilateral Convention on Mutual Administrative Assistance in Tax Matters and domestic laws.” (emphasis added)

However, at the March 2019 OECD Integrity Forum in Paris, the Global Forum explained during a panel that the Punta del Este declaration was more aspirational than binding, suggesting that it wasn’t enough to tick the second requirement (the sending country authorising banking information to be used beyond tax purposes).

The Redundancy Approach

In April 2019, the US Government Accountability Office (GAO) published the report “Foreign Asset Reporting:  Actions Needed to Enhance Compliance Efforts, Eliminate Overlapping Requirements, and Mitigate Burdens on U.S. Persons Abroad”. While the focus of the report as described by the title isn’t our biggest concern, the details mentioned there are very relevant for our discussion. The report basically describes that the US tax authorities (the IRS) has access to foreign bank account information based on FATCA (the US equivalent to the OECD’s CRS for automatic exchange of information), and based on form 8938 filed by taxpayers. The financial intelligence unit in charge of tackling money laundering (FinCen) has access to foreign bank account data through the FBAR form. In other words, both agencies require pretty much the same information about foreign bank accounts:

Because of overlapping statutory reporting requirements, IRS and FinCEN—both bureaus within Treasury—collect duplicative foreign financial asset data using two different forms (Form 8938 and FBAR)… Table 3 shows that individuals required to report foreign financial assets on Form 8938, in many cases, also must meet FBAR reporting requirements… Table 3 also shows that, in many cases, specified interests in foreign financial assets as defined in Form 8938 instructions are the same as the financial interest in such assets under FBAR. Further, as noted in table 3, the overlapping requirements lead to IRS and FinCEN collecting the same information on certain types of foreign financial assets. For example, both Form 8938 and FBAR collect information on foreign financial accounts for which a person has signature authority and a financial interest in the account. Form 8938 and FBAR also both collect duplicative information on several other types of foreign financial assets, such as foreign mutual funds and accounts at a foreign financial institution that include foreign stock or securities.

The ridiculous part, however, is that (back to the magic touch of tax authorities), the IRS cannot share information with the financial intelligence unit without a court order, even though the financial intelligence unit already has access to similar information (as described in the extract above):

IRS can share return information with other government agencies and others when it is allowed by statute… However, according to FinCEN officials, FinCEN, law enforcement, and regulators often cannot access information submitted on Forms 8938. While section 6103 provides other exceptions to disclosure prohibitions—such as allowing IRS to share return information with law enforcement agencies for investigation and prosecution of nontax criminal laws—such information is generally only accessible pursuant to a court order.

In other words, one absurd but still useful approach to counteract the fact that any information held by tax authorities cannot be shared with other local authorities, is the US redundancy: financial intelligence units could start asking from taxpayers and why not from foreign banks, the same banking information that is currently being exchanged among tax authorities under the OECD’s CRS and FATCA.

Of course we hope the OECD and countries will become more reasonable, and prevent redundancy and all the compliance costs, by simply allowing tax authorities to share information with law enforcement and financial intelligence units, as the GAO report also concluded:

Without congressional action to address overlap in foreign financial asset reporting requirements, IRS and FinCEN will neither be able to coordinate efforts to collect and use foreign financial asset information, nor reduce unnecessary burdens faced by U.S. persons in reporting duplicative foreign financial asset information.

Conclusion and next steps

The US case proves that many times different authorities already have access to the same or similar information based on different reporting requirements. This redundancy proves that tax authorities aren’t that special, and that this information isn’t so confidential that it shouldn’t be shared with other authorities, because they already have access to similar type of banking data.

The OECD has reports on cooperation between tax authorities and financial intelligence units, such as the 2015 report entitled “Improving Co-operation Between Tax and Anti-Money Laundering Authorities: access by tax administrations to information held by financial intelligence units for criminal and civil purposes”. But as the title suggests, the OECD is more interested in tax authorities having access to information, not the other way around.

It’s time for the Financial Action Task Force (FATF) and Egmont Group (network of financial intelligence units) to push to have access to the useful foreign banking data available to tax authorities. This way, they would counter the arguments that suggest that financial intelligence units don’t even want this information because they wouldn’t be able to handle it. But more importantly, it would allow banking data, not only to be used to tackle tax evasion (‘has John declared all the income accrued in this bank account?’) but also to prevent corruption and money laundering (‘how come John has so much money in a bank account, if his declared income is so low?’).

The Convention’s Art. 22.4 proves that the world doesn’t need a new treaty to allow tax authorities to share information with financial intelligence units, but simply to allow these local exchanges in their domestic law and to make sure every other country allows this extra use when they send information abroad. Then it will be up to each country to decide how much and when those local exchanges would take place. At the very least, the OECD, the FATF and the Egmont Group could research and publish details about the countries that are already allowing their tax authorities to share (local) information with other local authorities without a court order.

Edition #3 of the Tax Justice Network’s Francophone podcast/radio show: #3 édition de radio/podcast Francophone par Tax Justice Network

We’re pleased to share the third edition of the Tax Justice Network’s new monthly podcast/radio show for francophone Africa by finance journalist Idriss Linge in Cameroon. The podcast is called Impôts et Justice Sociale, ‘tax and social justice.’ It’s available for anyone who wants to listen to it, and, as is the case with all our monthly podcasts, (Spanish, Arabic, and English – and soon Portuguese), it’s free to broadcast for any radio station that wishes to broadcast it. Our French language podcast aims to contribute to ideas and debates on tax justice and social justice in the region. We’re sharing below this month’s episode:

Nous sommes heureux de partager avec vous cette troisième émission  radio / podcast du Réseau Tax Justice, Tax Justice Network produite en Afrique francophone par le journaliste financier Idriss Linge basé au Cameroun. Le podcast s’appelle Impôts et Justice Sociale. Il est disponible pour tous ceux qui veulent l’écouter et, comme tous nos podcasts mensuels, (espagnol, arabe et anglais), il est gratuit à diffuser pour toute station de radio qui souhaite le diffuser. Ce podcast en langue française vise à susciter des idées et des débats sur la justice fiscale et la justice sociale à de nouveaux publics. Nous partageons ci-dessous le tout premier épisode de ce mois-ci, suivi d’un communiqué de presse avec tous les détails sur le suivi de l’émission et où le trouver.

Dans cette édition qui dure plus que d’habitude, nous revenons comme sujet principal, sur la justice fiscale dans l’exécution des partenariats public privé en Afrique.

« Pour Attirer des fonds privés, l’acteur public qui est un Etat ou une collectivité décentralisée va ainsi sponsoriser les profits du secteur privé sur un projet et couvrir les risques et cela a un coût. Pour un investissement qui est dé risqué et qui rapporte beaucoup, parce qu’on parle d’un taux de croissance à deux chiffres, c’est l’investissement idéal. Alors on comprend pourquoi les défenseurs des entreprises privées comme les grandes firmes d’audit puisse promouvoir ce type de partenariats » Cecilia Gondard

Le reportage connait la participation de

Tous deux membres du groupe d’action pour la promotion du civisme fiscal en Afrique présent sur Facebook

Deux membre du GAPCF (Groupe d’Action pour la Promotion du Civisme Fiscal)

L’interview du mois nous est accordée par Cecilia Gondard, la responsable Senior des Politiques et du Plaidoyer chez Eurodad

Voulez-vous télécharger et écouter sur la route? Téléchargez sur votre téléphone ou votre appareil portable en cliquant sur “enregistrer le lien” ou “télécharger le lien” ici

A lire aussi

Le Manifeste des PPP: https://eurodad.org/files/pdf/5c619c00eaf6b.pdf

La partie immergée de l’Iceberg, Une évaluation critique des partenariats public-privé et de leur impact sur le développement durable : https://eurodad.org/files/pdf/55deea6309dbd.pdf

PPP: désamorcer la Bombe à retardement: https://eurodad.org/files/pdf/5a6b370f4ab52.pdf

Les 10 études de cas: https://eurodad.org/files/pdf/5bbdf41cd8baa.pdf

L’émission a bénéficié des informations contenues dans ce rapport du FMI.

N’oubliez pas que vous pouvez suivre ce Podcast sur des dizaines de radio francophones d’Afrique.

Vous pouvez aussi continuer de nous suivre et même interagir avec nous via

Vous voulez plus de nos podcasts? La playlist complète peut aussi être
trouvé sous ce lien.

Voulez-vous vous abonner? Abonnez-vous par courrier électronique en contactant le producteur [email protected] OU abonnez-vous à notre chaîne youtube,

Rising inequality and dysfunction in the tax haven of Jersey: a Taxcast special edition

In this special extended edition of the April 2019 Taxcast, broadcast from the tax haven of Jersey:

We don’t have politics in Jersey. We’re creating it now. We have in Reform Jersey the only political party in Jersey, stands on a platform and tries to adhere to its platform. That’s unique in Jersey politics because Jersey politics is run by 49 individuals who stand up and say, I’m a good bloke, good businessman. Vote for me. I’ll look after the best interests of the island. Trust me. And very little else usually in terms of policy.

Geoff Southern, elected Deputy and co-founder of Jersey’s only political party Reform Jersey

Featuring:

Want to download and listen on the go? Download onto your phone or hand held device by clicking ‘save link’ or ‘download link’ here.

Want more Taxcasts? The full playlist is here and here. Or here.

Want to subscribe? Subscribe via email by contacting the Taxcast producer on naomi [at] taxjustice.net OR subscribe to the Taxcast RSS feed here OR subscribe to our youtube channel, Tax Justice TV OR find us on Acast, Spotify, iTunes or Stitcher.

Join us on facebook and get our blogs into your feed

Follow Naomi Fowler John Christensen, The Taxcast and the Tax Justice Network on Twitter.

Adapt or step aside: pressure on OECD to reform pre-World War II tax rules as UN convenes historic tax meeting

At the crossroads of the most fundamental global corporate tax reform since the 1920s, the United Nations will hold a special meeting on Monday 29 April on outlining fair tax rules fit for the modern digital economy. The meeting, to be attended by over 50 country delegates and over a hundred tax experts, academics and activists, comes on the heels of the OECD’s recent proposals for root and branch reform of the international tax system to meet the challenges of an increasingly digital world – effectively marking the OECD’s last chance to retain its reign as a global rule-setter on international tax.

$500 billion is lost in corporate tax each year globally, according to research by the Tax Justice Network, due to systemic tax abuse by multinational corporations enabled by current international tax rules, particularly by the ‘arm’s length’ approach to taxing multinationals which has been the bedrock of international taxation for nearly a century.1 Compared to the economic outputs of the world’s economies, the $500 billion in tax dodged by multinationals each year would rank in as the world’s 26th largest economy – larger than the economic output of the United Arab Emirates, Ireland or Singapore.2 The IMF’s own estimates puts these tax losses at $600 billion a year.3

The OECD now faces the challenge of moving beyond the ‘arm’s length’ approach. However, in a new critique published today, the Tax Justice Network has raised the alarm on the various ways in which the OECD’s richer member countries may rig new tax rules against lower income nations. The organisation is calling for the UN to push for ambitious reform that makes sure tax contributions are paid in the countries where real economic activity takes place.

Alex Cobham, chief executive of the Tax Justice Network, said:

“There is now international consensus that multinational companies are avoiding hundreds of billions of dollars a year in tax, as a direct result of the OECD’s failed tax rules. With OECD member countries finally accepting that the arm’s length principle is not fit for purpose, and that the race to the bottom on tax rates must be stopped, this is the greatest opportunity for reform in decades.

“ All eyes are now on the UN to seize this moment for radical change and to lay down a marker for transparent tax rules fit for the 21st century – and fair for countries at all income levels.”

Liz Nelson, a director of the Tax Justice Network, said:

“This a watershed moment for securing the human rights of billions of people across the world. To build the sustainable world that the UN envisioned for 2030, where human rights are realised and inequalities, including gender inequalities, are minimised, we need to build a fair tax system that protects low income countries’ taxpayers and fosters economic sustainability.”

-ENDs-

Contact: [email protected], +44 (0)7562 403078

Download briefing paper

The OECD’s consultation on addressing the tax challenges of digitalisation

The Tax Justice Network welcomes the OECD’s international corporate tax reform proposals. Designed to address the challenges of Digitalisation of the Economy, the reforms more importantly ask critical questions about how and where trans national companies pay tax and look to address the current unequal distribution of how taxing rights across countries, especially developing countries. The OECD’s reform proposals go far beyond digitalisation, and now potentially extend to the entire economy of multinational companies. They effectively mark the OECD’s last chance to show itself capable of delivering international tax rules that address tax avoidance and the resulting global inequalities in nations’ taxing rights.

The International Monetary Fund report of March 2019 made an important contribution to the corporate tax debate recognising that the current international tax system is under stress. Also in March, the European Commission’s new measures to combat tax abuses in the digital economy were announced – in particular, these measures intend to ensure taxes are paid in the places where business is done, and where profits are really made.

What is significant about the consultation?

The OECD consultation reflects three great shifts in the tax justice debate. First, a recognition that the so called ‘arm’s length principle’ of taxing multinational companies has led to systemic tax abuse by multinationals and is not fit for purpose. Second, the explosion of both profit shifting and the growing high-quality research on the associated revenue losses variously estimated at US$600 billion annually (IMF researchers) or US$500 billion (Tax Justice Network), has emphasised that double non-taxation is the real concern, and not the double taxation that been heavily emphasised by multinationals and their advisers and lobbyists. The third shift is that the ‘race to the bottom’ has lost all intellectual credibility.

The first ‘pillar’ of reform discussed in the OECD proposals outlines a range of alternatives to the current arm’s length principle, including unitary taxation. Rather than assessing the profit in each entity within a multinational group, this approach evaluates the global profit of the entire multinational group, and then apportions it as tax base between countries of operation according to the share of the group’s real economic activity in each. The second pillar, a minimum tax rate, is equally warmly welcomed. Simply put a minimum tax could empower the individual states where multinationals’ real economic activity takes place.

Why do we need reform?

The distribution of taxing rights between states has direct consequences for the realisation of human rights within states, because lower-income countries suffer disproportionately high losses compared to their actual tax revenues. The current distribution of taxing rights escalates and amplifies social inequalities, especially gender inequalities, and in doing so engineers a range of discriminatory outcomes for women. The undermining of progressive direct taxation including corporate tax not only leaves higher inequalities in place on the revenue-raising side, but also reduces the funds available for redistribution through public expenditures.

How likely is it to happen?

A global minimum tax rate can be a powerful progressive tool, curtailing the race to the bottom – but to achieve this, it must be combined with a comprehensive tax base reform under pillar one.  That will be politically difficult to achieve.

The two pillars of the reform throw up a range of issues or risks that are political, more than technical. Chief among them is that that major OECD members, at the behest of their multinationals and related lobbyists, will seek to collapse progress back towards the status quo – just as happened in the BEPS process.

The proof of this concern will only be revealed over time. On Friday 26th April the United Nations’ 25-member Committee of Experts on International Cooperation in Tax Matters meets and more than 150 tax experts from member states, academia, business and civil society will participate in weeks series of meetings. A clear OECD failure to deliver for lower-income countries is likely to see momentum move rapidly to a globally representative UN forum instead.

Notes to Editor

  1. Tax Justice Network, Tax avoidance and evasion – The scale of the problem, http://taxjustice.wpengine.com/wp-content/uploads/2017/11/Tax-dodging-the-scale-of-the-problem-TJN-Briefing.pdf
  2. According to the International Monetary Fund, in 2018 the United Arab Emirates had a GDP of $424.6 billion, Ireland had a GDP of $372.7 billion and Singapore had a GDP of $361.1 billion.
  3. IMF, 2019, Corporate Taxation in the Global Economy, https://www.imf.org/en/Publications/Policy-Papers/Issues/2019/03/08/Corporate-Taxation-in-the-Global-Economy-46650. 
  4. The UN’s Economic and Social Council will hold a special meeting on international cooperation in tax matters on 29 April 2019: https://www.un.org/esa/ffd/wp-content/uploads/2019/04/2019-ECOSOC-Tax-meeting_Tentative-Programme.pdf

About the Tax Justice Network

The Tax Justice Network is an independent international network, launched in 2003. It is dedicated to high-level research, analysis and advocacy in the area of international tax and financial regulation, including the role of tax havens. The Tax Justice Network maps, analyses and explains the harmful impacts of tax evasion, tax avoidance and tax competition; and supports the engagement of citizens, civil society organisations and policymakers with the aim of a more just tax system.

www.taxjustice.net

The Tax Justice Network’s April 2019 Spanish language podcast: Justicia ImPositiva, nuestro podcast, abril 2019

Welcome to this month’s latest podcast and radio programme in Spanish 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 radiofónica! (abajo en Castellano.

In this month’s programme:

Guests:

En nuestro programa de abil 2019:

INVITADOS

MÁS INFORMACIÓN:

El enlace de descarga para las emisoras:  http://traffic.libsyn.com/j-impositiva/JI_abril_19.mp3

También para emisoras, el enlace de nuestro ‘trailer’: http://traffic.libsyn.com/j_impositiva/JI_Trail.mp3

Subscribase a nuestro canal de youtube en el playlist de Justicia ImPositiva aqui

Subscribase a nuestro RSS feed: http://j_impositiva.libsyn.com/rss

O envien un correo electronico a Naomi [@] taxjustice.net para ser incorporado a nuestra lista de suscriptores.

Sigannos por twitter en @J_ImPositiva

Y estamos en facebook