New report on European tax administrations’ capacity in preventing fiscal fraud and tax avoidance

The Tax Justice Network released today a report on the capacity of tax administrations in the European Union to fight inequality by combating fiscal fraud and tax avoidance. The report analyses the results of a survey consisting of 71 questions that was sent by the Tax Justice Network to the tax administrations of all EU Member States. It explores the data we received from seven respondent jurisdictions and combines it with additional data available through the International Survey on Revenue Administration (ISORA). A condensed version of this report has been presented by Frederik Heitmüller on 2 November 2018 at the CESifo Economic Studies Conference on New Perspectives on Tax Administration Research.

In recent years, there have been several initiatives to assess the capacity of tax administration by international organisations and other bodies. These include the Revenue Administration Fiscal Information Tool  (RA-FIT) by the IMF, the Fiscal Blueprints by the European Union and the Tax Administration Diagnostic Assessment Tool (TADAT) by the IMF. However, these initiatives are all either limited in scope, in continuance, or in transparency. The ISORA report, a collaboration between the OECD, the Inter-American Centre of Tax Administration (CIAT), the Intra-European Organisation of Tax Administrations (IOTA) and the IMF, is to date the most comprehensive available database of tax administrations by far. Nonetheless, there are still many data gaps in the evaluation of the capacity of tax administrations and there is currently no mapping available on the published statistics or public datasets by national tax administrations.

One of the reasons for these gaps is likely to be the sensitive nature and confidentiality of the data involved. As tax is directly related to the core of statehood and sovereignty, it is often jealously guarded, and some jurisdictions may be unwilling to share data that may reveal shortcomings in sensitive functions of tax administration.  Furthermore, to our knowledge, specific issues that are relevant to inequality have not been assessed in any of the reviewed surveys.

This report published today attempts to close this gap.

The report focuses on several topics that address data gaps we identified in the available datasets on capacity of tax administrations. Based on the analysis of the data, we identify the most critical challenges tax administrations face in countering inequality. These are predominantly:

While the data provided by the seven jurisdictions may not be sufficient to draw final conclusions about the capacity of all EU tax administrations, it provides an indication about which hypotheses are worth pursuing more in-depth in future research.

For example, an interesting finding relates to the scale of audit activity. We looked at the number of tax returns tax administrations have audited between 2015 and 2017, checking separately for corporate income tax, personal income tax and VAT. What we found is a decline in the practice of auditing tax returns, predominantly with regard to tax returns of corporations, as well as a decline in the number of on-site audits in two out of three countries that responded to that question.  Further research should investigate how this decline can be explained. Potential hypotheses include lower budgets or political interference, but also a greater reliance on IT and data analysis solutions or pre-populated tax returns.

Number of audits of tax returns – Finland

European tax administrations’ capacity table 1

This is the analysis of data by Finland, but a similar trend was seen for other countries.

We also revealed that the effective collection of penalties seems to be a problematic issue, as none of the jurisdictions that reported data succeeded in collecting more than 50 per cent of the penalties that were charged in any of the years. Further research could explore what stands in the way of an effective collection of penalties, whether administrations lack the capacity to collect or whether there may be more political reasons for a lack of enforcement.

Percentage of number of administrative penalties collected so far

European tax administrations’ capacity_table 2

The analysis of all the data we received as a response to our survey can be downloaded here.

Tax laws, progressive as they may be, may become toothless and even regressive if they are not properly enforced. The report emphasises the importance of conducting further studies and assessing whether the legal tools are effectively used by tax administrations to combat fiscal fraud and tax avoidance.

Today’s report is the first from a twin project, funded by the European Union Horizon 2020 as part of the Combating Fiscal Fraud and Empowering Regulators (COFFERS) programme. The twin project aims to generate a comprehensive comparative analysis of administrative and enforcement capacity of tax administrations and corporate registries in European member states, to counter fiscal fraud and tax avoidance. We will publish the second part, which focuses on corporate registries, in a few weeks.

Download the full report

Tax Justice Network’s November 2018 Spanish language podcast: Justicia ImPositiva, nuestro podcast, noviembre 2018

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:

Continue reading “Tax Justice Network’s November 2018 Spanish language podcast: Justicia ImPositiva, nuestro podcast, noviembre 2018” →

Passports and residency for sale: the OECD is sitting on its hands. Here’s how to fix the problem…

Passports and residency issued by many tax havens and secrecy jurisdictions in exchange for money (promoted as “golden visas”), are not only “golden” because they are valuable, but because they are expensive. They aren’t meant for the typical refugee fleeing a civil war, but for the very rich who have no intention of leaving their home, but want to pretend that they have (by using their newly purchased citizenship or residency) to escape from taxes and other laws, if necessary.

The Tax Justice Network has been warning about the risks of the sale of passports and residency to circumvent automatic exchange of information since 2014. It took four years for the OECD to take this matter seriously and in February of 2018 it opened a consultation about how to address this risk. As a response to this, the Tax Justice Network published a list of 56 risky jurisdictions offering passports and residency in exchange for money, based on the Financial Secrecy Index. Eight months later, on October 16th 2018 the OECD published a list of 21 jurisdictions whose residency and citizenship by investment schemes potentially pose a high-risk to the integrity of the automatic exchange of information. But within six days, four jurisdictions had already been removed from the blacklist, at a pace of one kosher “passport for sale” scheme every 1.5 days. I don’t know how she does it… Continue reading “Passports and residency for sale: the OECD is sitting on its hands. Here’s how to fix the problem…” →

Dos nuevos puestos en América Latina (two new jobs in Latin America)

 

Estamos buscando un/a investigador/a y un/a responsable de proyectos en América Latina. We are hiring a researcher and a project manager in Latin America. 

Investigador/a (researcher): https://taxjustice.net/lar (aplicar en / apply at https://taxjustice.net/latin-america-researcher antes del / by 09/12/18)

Responsable de proyectos (project manager): https://taxjustice.net/lap (aplicar en / apply at https://taxjustice.net/latin-america-project-manager antes del / by 09/12/18)

Seeking a French language radio and podcast producer (Chroniqueur radio et podcast, Afrique Francophone)

The Tax Justice Network is seeking a journalist from Francophone Africa (but not necessarily based there) to produce a monthly French-language 30-minute podcast and radio show. Each show will cover global tax justice news and ideas, with a focus on Francophone Africa, and will offer accessible, entertaining and solutions-based analysis. You will need strong and up-to-date experience of radio production, and preferably also of social justice reportage. As well as being a very strong communicator in French, you will need to be a confident English speaker to be able to follow our research closely and join occasional remote team meetings. You will be proactive, independent, fizzing with ideas and have a passion for tax justice and social justice.

« Tax Justice Network » cherche à recruter un journaliste originaire de l’Afrique Francophone (mais pas nécessairement basé dans la zone) pour produire chaque mois des émissions radio et podcasts d’une trentaine de minutes en français. Chaque émission portera sur des questions d’ordre général et d’actualité de justice fiscale qui seront traitées de manière compréhensible et ludique avec proposition de solutions et en se basant sur l’Afrique Francophone. Pour être éligible pour le poste, le candidat doit avoir une expérience solide et pointue en production radiophonique et de préférence, il doit avoir effectué un reportage sur le sujet de la justice sociale. En plus de disposer d’une excellente capacité de communication en français, le candidat doit être capable de bien s’exprimer en anglais pour pouvoir suivre de près les travaux de recherche que nous menons et participer occasionnellement et à distance aux réunions du staff. Les qualités personnelles recherchées sont la proactivité, la capacité à travailler de façon indépendante, la curiosité intellectuelle et une passion pour la justice fiscale.

Find out more and apply online at / En savoir plus et postuler en ligne via www.taxjustice.net/ftp

Edition 10 of the Tax Justice Network Arabic monthly podcast/radio show, 10# الجباية ببساطة

Welcome to the tenth edition of our new 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.

الجبایة ببساطة #10– الحرب على محاربة الفساد ومؤشر جديد للتقدم الاجتماعي في مصر  

Taxes Simply# 10 – The war on anti-corruption campaigners and activists, and a new indicator for social progress in Egypt

We start with a summary of October’s tax news from around the Arab region and the world, including:

In the second part of the programme, we talk with Mahinour El-Badrawi, the coordinator of Egypt Social Progress Index (ESPI), which is a project that seeks to present a multidimensional picture of Egypt’s social and economic well-being away from traditional economic indicators that ignore the experiences of tens of millions of those left behind. The Egypt Social Progress Indicator website: https://www.progressegypt.org/

In the third part of the programme, Walid Ben Rhouma interviews Achraf Aouadi, the president of I Watch, on the targeting of researchers and journalists working on issues of corruption and economic justice in the region and the world. The I WATCH website: https://www.iwatch.tn/en/

Continue reading “Edition 10 of the Tax Justice Network Arabic monthly podcast/radio show, 10# الجباية ببساطة” →

Women continue to take the lions share of austerity

Ahead of the UK Autumn budget statement (29th October 2018) the UK Women’s Budget Group (WBG) provided an important analysis of why austerity isn’t over, especially for women living in the UK. It is a useful point to reflect on the role of tax and its gendered implications. Continue reading “Women continue to take the lions share of austerity” →

Whistleblower Rudolf Elmer’s court victory: the long arm of Swiss secrecy law gets shorter

We’ve written many times about Swiss whistleblower Rudolf Elmer’s (pictured above) long legal battles against Swiss banking secrecy 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.

This October Elmer has achieved a significant victory against Swiss banking secrecy laws and how far they can be applied in jurisdictions across the world. He worked for Swiss bank Julius Bär in the Cayman Islands when he leaked data on wrongdoing. Now the Swiss Supreme Court has ruled that if employment contracts in locations outside Switzerland are local, Swiss banking secrecy doesn’t apply and can no longer be used to impose jail terms on whistleblowers. This is how the Economist covered the case:

The country’s supreme court decides that overseas employees of Swiss banks can leak away”

We’re also sharing here an English translation of a report by Swiss law professor Werner Kallenberger, published on 25th October 2018 here, in Die Linke Zürcher Zeitung. Continue reading “Whistleblower Rudolf Elmer’s court victory: the long arm of Swiss secrecy law gets shorter” →

The case for supporting economic justice


The crisis of philanthropy

“We live in an age that loves the solution. But a lot of problems are problems of justice rather than problems of tinkering with an engine. And when you have a problem of justice, you can’t just move forward. You have to evaluate the whodunit.”

So says the author and journalist Anand Giridharadas in his recently published book, Winners Take All: The Elite Charade of Changing the World. The book has thrown down the gauntlet to philanthropists – society’s winners – to support efforts to reform the system that has made them rich while failing to improve living standards for the majority, rather than funding ‘sticking plaster’ initiatives that sound good but do little more than tinker around the edges.

Giridharadas argues that the top 1 per cent have a vested interest in perpetuating a system that produces ever greater inequality. In the USA, the incomes of the top 1 per cent tripled since 1980, while those of the bottom half stagnated. Similar trends are visible in other countries. This didn’t happen by itself. Vested interests successfully lobbied for low tax rates, less regulation and fewer social protections. These policies delivered an economy where the rewards of growth go to those at the top.

Many members of this elite recognise that the world has problems, but where they try to fix them, they do so in ‘safe’ ways that do not challenge the rules of the system: for example, by supporting entrepreneurship and social impact investing. Worse still, they support ‘safe’ initiatives while fighting the efforts of governments to address the real structural issues, because this would undermine their status, challenge their legitimacy and hurt their bank balances. (This has parallels with the historic and ongoing efforts of many Western governments to frame the causes of poverty in developing countries as anything other than an unjust global economic system that has been designed by the West to serve its own interests.)

As a result, concludes Giridharadas, most philanthropy is ineffective, and worse, it hides the real solutions. It is ‘fake change’. Many initiatives funded by the winners of the current system do help people in desperate need. But as they give back, elites aim to protect the system that causes many of the problems they try to fix. Their philanthropy masks the harm done by an economy that works in their interests. What we really need, he argues, is real systemic change to address the most pressing global problems in a sustainable way. Elites talk about promoting opportunity for all. But this is only possible when the economy is genuinely inclusive. This means higher taxes, more regulation, better social protections, and properly funded public services. Economic growth alone is not enough to produce a more equal society.

Broken economy, broken politics

At the Tax Justice Network, we strongly support the view that those people with wealth need to recognise that the global economic system that enabled them to become wealthy is deeply flawed and needs to be reformed if we are to have any hope of reversing inequality. And it’s not just about saving the economy – it’s also about saving democracy. Rocketing inequality is fuelling discontent around the world, as the principles and institutions of democracy and global cooperation are undermined and attacked by nationalist demagogues. The social compact that has shored up public support for open, democratic regimes has been weakened by the increasing dominance of a strain of market fundamentalism that has restricted the benefits of economic growth to the very top of society, without sharing it with everyone else.

Over the last 40 years, the neoliberal project has successfully persuaded people that a free and unregulated market is inseparable from individual liberty, and therefore from democracy. But neoliberalism has failed. The global financial crisis in 2008 and the subsequent downwards pressure on living standards has given birth to a breed of right-wing nationalists across the world who falsely blame these problems on immigration and free trade, when the systemic roots of these issues are rising household debt and falling real incomes combined with weak regulation and lack of transparency within the global financial system.

As it happens, the neoliberals were wrong. Liberty and democracy do not go hand in hand with unfettered capitalism. In fact, the opposite is nearer the truth. Democracy can only thrive if the economy can deliver fair and sustainable growth, support the social contract and provide the opportunity for everyone to participate in society. Political freedom is linked to freedom from want. The rise of antidemocratic forces as a result of the failure of neoliberalism to distribute the fruits of economic growth fairly are testament to this dependency. The unequal sharing of the proceeds of growth has been exacerbated by reduced tax and regulation, leading to reduced revenues for governments and the consequent haemorrhaging of public service budgets, coverage and quality. This has undermined public faith in the willingness and ability of governments to take steps to protect the living standards of its citizens and has led to the growing appeal of politicians who identify convenient scapegoats to blame for these problems.

Organisations like the Tax Justice Network, which seeks to make the global tax and financial system fairer and more transparent, have a critical role to play in defending democracy from the demagogues, as well as building the foundations of a fairer economy. The Tax Justice Network pursues systemic changes that address the international inequality in the distribution of taxing rights between countries; the national inequalities – including gender inequalities – that arise from poor tax policies; and the national and international obstacles to progressive national tax policies and effective financial regulation.

Our challenge to philanthropists

We are looking for those brave philanthropists who can give things up, not just give back, and help us. Philanthropists need to get out of the mindset that they can make a real difference by supporting projects that tinker around the edges. The only way to see real change is to tackle the deep structural roots of inequality, and to support governments to provide services for all of their citizens.

This especially applies to people who work in finance and who want to change the world for the better. A recent Guardian article by our colleague Nick Shaxson, author of Treasure Islands and The Finance Curse, outlines the damage done to the wider UK economy by its oversized finance sector. A research paper by Sheffield University estimates that the ‘finance curse’ has taken £4.5 trillion out of the UK economy between 1995 and 2015. Many well-meaning finance professionals give to charities, either directly or through their own foundations; some even embark on finance careers in order to ‘earn to give’, encouraged by the effective altruism movement. But, as Giridharadas has argued, this philanthropy risks doing more harm than good by diverting attention away from the significant damage that the finance sector in its current form does to the rest of the economy and to society at large, and from the urgent need to reform it in order to reduce this damage.

So, whether you work in finance or have become wealthy by other means, or if you work for a foundation that is interested in progressive change: if you want to change the world for the better, don’t just do what’s comfortable. Support genuine, global reform in pursuit of economic justice. Be the change; don’t indulge in ‘fake change’.

And if you’re part of the 99 per cent, not the 1 per cent, then you need to be part of the solution too. Philanthropists won’t change the world by themselves, even if they ditch ‘charity’ in favour of justice. Your support is needed – in voting and campaigning for change, in exercising your rights (and responsibilities) as consumers, and of course in helping those organisations that aim to tackle the systemic problems that we face.

How oversized finance sectors are making us poorer in the Tax Justice Network’s October 2018 podcast

In the October 2018 Tax Justice Network monthly podcast/radio show, the Taxcast:

Continue reading “How oversized finance sectors are making us poorer in the Tax Justice Network’s October 2018 podcast” →

Country by country reporting for the Sustainable Development Goals

I had the honour this week of addressing ISAR35, the 35th annual session of the UN’s Intergovernmental Working Group of Experts on International Standards of Accounting and Reporting (all presentations are available here; my slides are also below). The focus was on developing a framework to carry the logic of the Sustainable Development Goals (SDGs) into a set of core indicators for reporting by individual companies.

The ISAR experts include accountants and integrated reporting specialists from all over the world as well as country delegations. Excitingly, they are well along the road to establishing meaningful country by country reporting – which would fit perfectly with the logic of our proposal, now going into country pilots, for an indicator for SDG 16.4 on the profit shifting component of illicit financial flows.

What remains for company reporting is to ensure that the scope is sufficient to deliver the relevant accountabilities for SDG progress; and that there is a single, robust, underlying technical standard. And there’s every reason to think this will be achieved…

Continue reading “Country by country reporting for the Sustainable Development Goals” →

Why the German government’s blockade of corporate transparency is harming all of us

The German government is currently blocking a measure to publish country-specific balance sheet data, known as country by country reporting, in Brussels. Citizens and European politicians could use this data to free themselves from the headlock of the world’s most powerful lobbyists and tax avoiders. So far, however, the German government has failed to recognise both the inherent opportunity for a renewal of the European project and the EU’s great weight as a standard-setter in the global economy.

Since the global financial crisis of 2008, journalists have used leaks and painstaking research to show the industrial scale of tax trickery by the world’s largest economic players. Whether Google, Apple, Facebook, Amazon, Ferrero, Starbucks, BASF, Ikea, Vorwerk or SAP: their stories all too often give rise to a picture of brazen bilks who are flouting the public on top of causing the injury of unpaid taxes when they reel off their mantra of paying taxes everywhere in accordance with the law.

This assertion is only partially correct, as is shown by the billions in additional taxes assessed to be due during corporate tax audits. In 2016, for example, the tax authorities in Germany collected over €10 billion in taxes that large companies had failed to include in their tax returns. Data by the OECD shows that in 28 countries that reported data for 2015, on average additional 10.7 per cent of total corporate tax revenues are assessed through corporate income tax audits. In these 28 countries, on average fifty percent of all corporate income tax audits resulted in additional taxes assessed. To claim that corporates always pay tax everywhere in accordance with the law is thus simple corporate spin.

But the corporate mantra is badly misleading for another reason, too. It contains the subtle pretense that these companies are completely detached and uninvolved in the legislative process. In reality, global corporations afford a highly efficient lobbying machine and professional helpers. These are privileged professional groups such as tax advisors, lawyers and accountants who devise highly complex legal constructs for tax avoidance on the assembly line. To do this, they resort to artistically woven networks that reach from the economy to the highest political circles in order to guarantee impunity and tax loopholes.

These insider relationships function as long as they can work in secret. Essential for this opaque, criminogenic environment is that the extent of industrial tax avoidance is not exposed to public scrutiny. In this respect, Paradise Papers, LuxLeaks & Co. are serious system errors, anomalies in the matrix that have allowed a rare look behind the scenes. Individual errors, however, cannot paralyze a system.

The worst case scenario, the system breakdown for industrial tax avoidance, on the other hand, would be the regular measurement of tax dodging by public country by country reporting. These reporting obligations would reveal important indicators of economic activity, profits and tax payments for all countries in which corporations operate. Similar obligations already exist in the EU banking sector. A few months ago, German economists at the University of Cologne showed that these disclosure requirements have led to significantly higher tax ratios, especially for banks with tax haven operations.

Public country by country reporting generates more tax revenue due to incalculable reputational risks. If a company has to assume that the “fruits” of the elaborate tax acrobatics will be easily visible to the public at the end of the day, then suddenly other goals than aggressive avoidance play a more important role: management must act for the good of the company and therefore avoid possible calls for boycotts and negative headlines. When in doubt, corporate leaders are more afraid of reputational damage and shareholder pressure than tax authorities. The same applies to the tax authorities: their political leadership is more likely to shy away from unlawful or questionable deals if they threaten to entice enquiries.

The EU Commission and the EU Parliament have therefore proposed introducing such reporting obligations for the largest corporations in all sectors. Annual, complete financial transparency for the largest corporations could trigger incalculable reactions from voters, small and medium-sized domestic companies and consumers. Equipped with such corporate data, they could make better informed decisions at the ballot box, in the chamber of commerce and at the supermarket shelf on how they want to use their vote, their influence and their household budget.

Those who suffer most from corporate tax dodging are average and low-income earners, because they can hardly evade taxation via value-added tax and payroll tax and thus step into the breach for missing tax revenues. In line with the trend of recent decades, these groups shoulder a growing share of the tax revenue. Generally, these are the same social strata that also suffer most from a lack of quality public services due to a lack of taxes – be it a shortage of teachers at public schools, under-equipped public universities or under-funded social services for single parents.

The same applies to small and medium-sized companies, which are losing out against big companies. Double standards are also applied when it comes transparency. Insofar as they are only active domestically, the annual financial statements of small and medium-sized enterprises usually contain the balance sheet data, the publication of which the global monopolistic giants have so far successfully resisted.

No wonder, then, that the EU Commission’s request rouses powerful, ancient forces to resist. In 1978, such a system breakdown was looming on the horizon when the United Nations was on the brink of obligating multinationals to publish annual accounts for every single subsidiary in their global corporate web – including in all tax havens. With the help of the USA, Japan and other OECD countries, economic lobbyists succeeded in stopping this push at the last minute. Instead of the United Nations, private accounting firms have since been enthroned by the OECD as standard setters.

In a classic manner, the fox was appointed guardian of the hen-house: to this day, it is above all the Big Four accounting firms that set the influential accounting standards for corporations. The European Union and many other countries in the world have so far nodded off these as supposedly non-political, purely technical standards.

This could change if the Federal Government finally gave up its opposition to the proposal for public country by country reporting. In the European Council of Ministers, Germany is playing the key role – and has so far rejected public country by country reporting alongside Luxembourg, Ireland, Cyprus, Malta, Hungary, Sweden and Austria. With the exception of Sweden, all other countries are more or less notorious corporate tax havens, and thus hardly surprising opponents of the reform.

In short: it is one of the regulations where the SPD-led ministry would be well advised to take an example from the CSU Minister of Agriculture and his Glyphosat decision and “do the Schmidt” – simply to give its approval in Brussels on its own. There are more unworthy plans to jeopardize coalition peace. Instead, every argument, however far-fetched, against this proposal is being made by the business community – and unfortunately many of them have so far been taken up by the government coalition and the SPD finance minister.

As long as Germany hides behind narrow-minded legal arguments, irrational fears of the decline of Germany as a business location or the retracting of half-baked intermediate steps already achieved, Europe cannot prosper. It is time for Germany to find its way from being Europe’s taskmaster to a new role. Germany should no longer deny Europe’s weight as a standard-setter for the world economy and help give globalisation a more human face. Europe needs to expand its efforts on this ethical mammoth project to the extent that its great transatlantic ally is failing.

For this very reason, however, Europe and Germany still have an important lesson to learn from the USA: to finally use our market access as a lever to enforce (transparency) standards. The window for the adoption of the proposal ready for signature in Brussels is closing rapidly – there are only a few weeks left to get it through before the EU elections. What are we waiting for?

How the UK can raise £2.5bn from tax-avoiding multinationals today

15 years ago the Tax Justice Network proposed that multinational companies be required to report publicly on their operations, profits and taxes paid in each country where they operate. Our aim was to bring the transparency of the world’s biggest economic actors more in line with that of individual companies operating in a single country. Tax expert Richard Murphy wrote a draft international accounting standard, and then we took it to the world.

In 2013, the G20 and G8 groups of countries recognised the importance of this data in the fight against tax avoidance, and mandated the OECD to introduce just such a standard. But as yet, the data remain private to tax authorities. The UK passed legislation two years ago that would allow it to make the data public – but for unknown reasons, the government has not used this power.

Now, in joint work with our independent sister organisation Tax Justice UK, we present new evidence showing that public country by country reporting could raise revenues of £2.5 billion a year. The Chancellor Philip Hammond should simply say the word in his budget speech next week.

Continue reading “How the UK can raise £2.5bn from tax-avoiding multinationals today” →

Desperate marketing: Jersey Finance trolls The Spider’s Web film

Viewers of Michael Oswald’s seminal film on Britain’s tax haven empire have been bemused in recent days by a pop-up ad put out by Jersey Finance, the finance industry lobby in tax haven Jersey.  The ad, running under the title ‘Reality Check – Dispelling the Tax Haven Myth’, plays the usual tax haven trick of claiming that Jersey doesn’t tolerate tax evasion while ignoring concerns about tax avoidance and non-cooperation with anti-corruption transparency measures.

Since uploading The Spider’s Web for free viewing last month, close to three quarters of a million viewers have accessed the English language version (and over ten thousand the French language version). Jersey Finance’s ad campaign appears to be a panic reaction to this huge success – although we doubt that tax haven claims to having given up on the bad old ways will convince many people viewing the film.

Continue reading “Desperate marketing: Jersey Finance trolls The Spider’s Web film” →

Call for papers: Tax Justice Network annual conference #tjn19

CALL FOR PAPERS AND PANELS

2-3 July 2019

City, University of London

  

Download PDF summary | Submit abstract or panel proposal

The challenges of tax justice do not exist in a vacuum. It is not an accident that billions of dollars are lost worldwide each year to tax avoidance and tax evasion. Nor is there anything random about the failure to tackle loopholes, or to move forward proven measures to improve transparency and accountability of the actors, or simply to maintain progressive taxation.

The professional enablers – including banks, law firms and the major audit and accounting firms, along with real estate agents, trust companies and others, and myriad lobbying groups– are key players in both the design of schemes for tax abuse and the prejudicial political influence that undermines tax justice, and in some cases in facilitating criminal activities. The resulting impacts on human rights, including women’s rights, are dramatic.

This year, our conference will focus on qualitative and quantitative research that explores the role and the influence of the enablers, and innovative proposals for their better regulation.

The 2019 conference is co-organised by the Association for Accountancy & Business Affairs, City, University of London (CityPERC) and the Tax Justice Network.

The organisers wish to invite original, high-quality papers for presentation.

While we particularly welcome papers that focus on the role of professional enablers, proposals will be considered on any aspect of tax justice:

  • Tax competition and the race to the bottom, including the finance curse and possible implications of the UK’s exit from the European Union
  • Tax justice and human rights, including economic and social inequalities
  • Financial secrecy: mechanisms for hiding ownership, income or profit shifting, and policy responses at the national, regional or global level
  • Scale of revenue losses from tax abuses, and the human (eg inequality) impacts
  • Issues and policies affecting whistleblowers

In addition, we welcome proposals for panels (a chair and two or three speakers) and for innovative session formats addressing a particular theme. We will only consider gender-balanced sessions.

Please submit abstracts or panel proposals of up to 500 words, along with the required supporting information, using our online application form. The deadline for submissions has been extend to 31 December 2018. The review panel will communicate decisions in January 2019. Final papers will be due by March 2019.

Financial support may be available for speakers. Please indicate with your submission if you would require support to be able to attend. This year’s conference will take place in English only.

Registration will open when the preliminary programme is published in January 2019. More information will be published in due course at https://taxjustice.net/tjn19.

For any queries, please email [email protected].

This conference is the latest in an annual series dating back to 2003. The events bring together academics, researchers, journalists, policy staff of civil society organisations, consultants and professionals, elected politicians, and government and international organisation officials to facilitate research, open-minded debate and discussion, and to generate ideas and proposals to inform and shape political initiatives and mobilisation. Recent events in this series: 2018 | 2017

The European Union, tax evasion and closing loopholes: new report

Today, a new report commissioned by the Greens/EFA group in the European Parliament and written by the Tax Justice Network’s Andres Knobel demonstrates that despite progress in recent years on closing down opportunities for tax evasion, there are still significant loopholes for citizens and multinationals to evade paying taxes where they are based.

The study, “Reporting taxation: Analysing loopholes in the EU’s automatic exchange of information and how to close them”, shows that in order to close down loopholes for tax avoidance and evasion the EU urgently needs to revise the DAC2 and DAC3 directives, which provide for the automatic exchange of financial information and of tax rulings respectively. The EU must be ready to sanction financial centres that fail to exchange complete information with the EU and should include non-cooperative jurisdictions on its tax blacklist, including Tax Haven USA. The report also calls for much greater due diligence and monitoring of Golden Visa schemes to be sure that individuals aren’t just buying their way out of their tax obligations.

As the Greens/EFA spokesperson on tax Sven Giegold says:

Europe must speak with one voice and say to those currently cheating on their obligations to either play by the rules or quit the game.”

Continue reading “The European Union, tax evasion and closing loopholes: new report” →

Tax Justice Network’s October 2018 Spanish language podcast: Justicia ImPositiva, nuestro podcast, octubre 2018

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:

Continue reading “Tax Justice Network’s October 2018 Spanish language podcast: Justicia ImPositiva, nuestro podcast, octubre 2018” →

It’s time to tax wealth properly

Wealth taxes are now rising fast up the global political agenda. For OECD countries, taxes on “property” have declined as a share of all taxes, from close to eight percent of all taxes in the 1960s, to a little over five percent in 1980, a level at which they have stagnated ever since.

Continue reading “It’s time to tax wealth properly” →

How City of London finance is making us poorer – infographic

A new report published today by the Sheffield Political Economy Research Institute at the University of Sheffield reveals the UK’s oversized financial sector has cost the economy £4.5 trillion in lost economic output between 1995 and 2015 – equivalent to £67,500 for every person in the UK.

The report finds that the UK economy would likely have performed much better in overall growth terms if its finance sector was smaller, and if finance was more focused on supporting other productive areas of the economy.

Also published today is a new book by Nicholas Shaxson, entitled The Finance Curse: How Global Finance is Making Us All Poorer. The book sets out a new economic framework referred to as the “finance curse” for understanding how a financial centre that has grown above its useful size and role becomes predatory and harmful to the economy that hosts it. He argues the City of London is draining resources and talent from other economic sectors, creating large economic inequalities and spurring financial crises.

Scroll down to view infographics and videos about the finance curse and how it impacts on us all. You can read Nicholas Shaxson’s Guardian long read here, his blog here and our full press release here.

 

 

Video: The Finance Curse

Video: What is Financialisation?

Video: The ‘Competition Agenda’ – why market competition between nations is a bad idea:

The Finance Curse and the £4.5 trillion hit to the UK economy

The Finance Curse, a concept first developed by John Christensen and Nicholas Shaxson for TJN, is now the subject of a Long Read article in The Guardian.

The article mentions a new study by Andrew Baker of the University of Sheffield, Gerald Epstein of the University of Massachusetts Amherst, and Juan Montecino of Columbia University, estimating that the UK has suffered a cumulative £4.5 trillion hit to its GDP from 1995-2015, due to its financial sector being too large and having turned away from its proper traditional functions towards more harmful and predatory ones.  That is equivalent to 250 percent of GDP – or £170,000 per UK household.

Continue reading “The Finance Curse and the £4.5 trillion hit to the UK economy” →

Edition 9 of the Tax Justice Network Arabic monthly podcast/radio show, 9# الجباية ببساطة

Welcome to the ninth edition of our new 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.

In the ninth issue of الجباية ببساطة (Taxes Simply) we start with a summary of September’s tax news from around the Arab region and the world, including:

Continue reading “Edition 9 of the Tax Justice Network Arabic monthly podcast/radio show, 9# الجباية ببساطة” →

The Tax Justice Network seeks two new board members

The Tax Justice Network board ensures that we have the necessary resources, systems and policies to achieve our objectives, and works closely with the rest of the team to ensure that we have identified the right strategic and tactical priorities and opportunities.

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.

We currently have eight board members, including four executive directors (each leading one of our four strategic programmes), and four non-executive directors. The existing board provides unrivalled depth of knowledge and experience in a diverse range of fields linked to tax justice, including economics, law, accounting, audit, human rights and gender, and organised labour, as well as a geographic spread across three continents (Europe, North America and Africa).

We are now looking to recruit two additional non-executive directors:

Tax expertise is not necessary for either position, since the Tax Justice Network is staffed by technical experts and can draw on a group of senior technical advisors. We are looking for people who can start in early 2019. The Tax Justice Network is a global virtual organisation, with no offices, and the board meets four times a year (three times online, and once in person at our annual research conference). The roles are unpaid, but reasonable expenses will be covered.

Click the link below for more information, including the background to this recruitment and how to apply. Applications are due by 30 November.

Tax Justice Network Non-Executive Director Advertisement 2018