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New report on abusive tax arrangements hurting Greece

From SOMO in the Netherlands:

How Canadian mining company Eldorado Gold destroys the Greek environment and dodges tax through Dutch mailbox companies

A new SOMO report reveals that Greece’s economic recovery is being undermined by large-scale tax avoidance – enabled by the Netherlands. At the same time, Greece endures harsh austerity measures imposed by the European Commission, European Central Bank and IMF which are supported by the Netherlands. Continue reading “New report on abusive tax arrangements hurting Greece” →

Do lower tax rates curb tax cheating? Really?

Median statutory corporate tax rates, by country income group, 1980-2010. (Source: IMF.)

It’s a good question. Now, an Australian story, via The Guardian:

“Treasurer Joe Hockey has said Australia is “losing control of our destiny from a taxation perspective” because of “holes” in the tax treatment of multinational corporations, as a parliamentary committee prepares to grill global companies about the tax they pay and former tax officials warn that the tax office has lost the expertise to tackle the problem.”

Continue reading “Do lower tax rates curb tax cheating? Really?” →

The Price We Pay – interview with director Harold Crooks

Watch the Canadian Brodcasting Company interview with film director Harold Crooks discussing his film The Price We Pay.

UNCTAD: multinational tax avoidance costs developing countries $100 billion+

Exposure to offshore hubs. Click to enlarge.

The UN Conference on Trade and Development (UNCTAD) has just published a major new study on corporate tax in developing countries, which contains a wealth of new information analysis as well as some important headline numbers: notably that developing countries lost around $100 billion per year in revenues due to tax avoidance by multinational enterprises (MNEs), and as much as $300 billion in total lost development finance. Continue reading “UNCTAD: multinational tax avoidance costs developing countries $100 billion+” →

An African civil society perspective on Financing for Development

From the Uncounted blog, run by TJN’s Director of Research, Alex Cobham

The African regional consultation on Financing for Development (FfD) took place at the start of the week (like the European one). The submission from TJN-Africa puts particular emphasis on inequality, including women’s rights, and on global data issues. Continue reading “An African civil society perspective on Financing for Development” →

Britain’s new company registry is a job half done

First, the good news: the UK government has committed to creating a central public register of company ownership following Parliament’s approval of this crucial measure to tackle crime and tax dodging. Continue reading “Britain’s new company registry is a job half done” →

Quote of the Day on Trickle-Down Economics

Trickle-down: the theory explained

Economist John Kenneth Galbraith described trickle-down theory as “the less than elegant metaphor that if one feeds the horse enough oats, some will pass through to the road for the sparrows.” Which pretty much summarises what has happened in practice over the past forty years as the theory has been rigorously applied by giving tax cuts to rich people and powerful corporations. Continue reading “Quote of the Day on Trickle-Down Economics” →

What is competitiveness? #1 – Robert Reich

From the Fools’ Gold blog, an article that speaks for itself

What is Competitiveness? #1 Robert Reich

This is the first in an ongoing series of articles we are planning, to explore what competitiveness is, from the perspective of particular public figures or intellectuals. For the first in this series we’ve chosen Robert Reich, a former U.S. Labor Secretary. He’s written an article in plain English that makes a number of clear and important points, which are still fully valid even though it was written in 2011.

It begins with an excellent summary:

“Whenever you hear a business executive or politician use the term “American competitiveness,” watch your wallet. Few terms in public discourse have gone so directly from obscurity to meaninglessness without any intervening period of coherence.”

Continue reading “What is competitiveness? #1 – Robert Reich” →

Meet TJN in Oxford to discuss the fallacy of tax “competitiveness”

The Tax Justice Network Podcast, March 2015

The Tax Justice Network Podcast, March 2015

In the March 2015 Taxcast: Democracy for sale – how our politics rely heavily on tax haven-friendly donors. Also, we ask: why is HSBC shutting down offshore accounts in Jersey? Are we in the final few years of the corporate income tax? Is Australia’s exempting of big companies from new transparency rules a joke? Plus more scandal and analysis that you won’t find anywhere else. Continue reading “The Tax Justice Network Podcast, March 2015” →

Tax haven Gibraltar sues newspaper for calling it a tax haven

Gibraltar in deep waters?

Another story from TJN’s Department of You-Couldn’t-Make-This-Stuff-Up. News is coming out that the government of Gibraltar is planning to sue Spanish newspaper ABC for defamation. Apparently the Gibraltarians take exception to the British Overseas Territory being depicted as a tax haven.

Here is the beef:

“THE Gibraltar government is suing a Spanish daily national over a front page story which pictured the Rock as an iceberg of dirty money.
The article, which appeared in ABC newspaper, labelled Gibraltar a ‘tax haven’ and alleged it is home to ‘15 organised crime gangs’ connected to drug smuggling, money laundering and the Russian mafia.
A defamation claim has been launched by the government, who claim the allegations are ‘wholly inaccurate and damaging to the reputation and name of Gibraltar’.”

Can this be true? A couple of things surprise us about this story, beyond the fact that countries don’t sue newspapers (even if the reverse ain’t true).

First, according to TJN’s financial secrecy index, Gibraltar scored a wholly unpleasant 79 out of 100 in 2013, placing it among the most secretive and least cooperative jurisdictions on the planet. The government of Gibraltar has never disputed these findings, so its claim against ABC strikes us as being akin to the Pope suing a newspaper for describing him as a Catholic.

The charts below tell part of the story, but take a look at the fuller story here.

Second, its not clear, to us at least, how a government can sue a newspaper for defamation. This sounds like the usual tax haven blowing-off stuff that we hear all the time from these bully boys. Perhaps Gibraltar’s Head of State should be consulted before her government kicks the hornet’s nest and triggers yet another diplomatic row between Britain and Spain.

For the record, today’s blogger worked offshore in Jersey in the dim and distant. The instruction from senior partners in London was to direct the really, really dodgy business away from Jersey to, err, Gibraltar. For examples of some the types of dodgy business that’s been linked to Gib in the recent past look here, and here, and here, and here, and it goes on and on ad nauseam.

One of our only slightly tongue in cheek definitions of a tax haven, or secrecy jurisdiction, is that it denies being one. “We are not a tax haven. They all say that.” And while we’re on the subject of tax haven deniers, take a look at the comments here from Jersey’s Geoff Cook, now Chief Exec of Jersey Finance, formerly responsible for wealth management at, whoops, HSBC. Some people have no shame.

People’s Parliament to discuss How Corrupt is Britain?

On Thursday 26th March 2015, the People’s Parliament will meet at Westminster in London to discuss a complex question, How Corrupt is Britain?

British people have long prided themselves on having a relatively corruption-free liberal democracy. Corruption, as the old saying goes, is something that happens in another country. Continue reading “People’s Parliament to discuss How Corrupt is Britain?” →

The UK’s money laundering rules support debanking of poorer countries

By Alex Cobham, TJN’s Director of Research. Originally posted at his blog Uncounted.

Poverty – a bad money-laundering risk factor

The UK’s Financial Conduct Authority has revealed the basis on which it ranks jurisdictions as low or high risk for money laundering – and it seems inevitable that it will support debanking of poorer countries. Continue reading “The UK’s money laundering rules support debanking of poorer countries” →

New Report: Ten Reasons to Defend the Corporate Income Tax.

UPDATES

2018 – Tax incentives in mining: minimising risks to revenue, OECD/Intergovernmental forum on mining, minerals, metals, and sustainable development. “Tax incentives are costly, leading many countries to forgo vital revenues in exchange for often illusive benefits. . . there is little evidence that tax incentives are effective at attracting mining investment in developing countries.”

March 2017 – Tax Spillovers: a New Framework. Exploring how different taxes “spill over” – not just across borders, but also among different elements of one country’s tax system. By Andrew Baker and Richard Murphy.

2017 – Rise of ineffective incentives: New empirical evidence on tax holidays in developing countries Saila Naomi Stausholm Copenhagen Business School. “The effect of tax holidays on FDI is negligible and decreasing, and importantly, that it does not translate into neither real capital accumulation nor economic growth.”

Sept 2016 – New report disproves US corporations’ false narratives on tax – via Americans for tax fairness

Sept 2016 – Why we need to tax corporations now more than ever – via Kimberly Clausing

Aug 2016 – Corporate tax cuts: why the old analyses don’t stack up – via Fair Skat

Jan 2016 – The effect of profit shifting on the corporate tax base – Kimberly Clausing, TaxAnalysts. The point being that corporate tax cuts don’t make a dent unless your rates are already close to zero. (For wonks: “They find a nonlinear tax response, with far more responsiveness at lower tax rates than at higher ones. Findings indicate tax semi-elasticities of -4.7 at corporate tax rates of 5 percent and -0.6 at tax rates of 30 percent.”)

Oct 2015 – Options for Low Income Countries’ Effective and Efficient Use of Tax Incentives for Investment – G20, IMF, OECD, UN, World Bank joint report. Tax incentives don’t generally work, and have a high fiscal cost.

2014 – Determinants of Foreign Direct Investment in EU Countries – Do Corporate Taxes Really Matter? “Our results suggest that there is no statistically significant effect of corporate taxes on FDI.”

New Report: Ten Reasons to Defend the Corporate Income Tax.

Trillions in public spending at risk as attacks on corporate tax intensify

Today the Tax Justice Network publishes a landmark report entitled Ten Reasons to Defend the Corporation Tax.

The short summary document is here, and the full document is here. Continue reading “New Report: Ten Reasons to Defend the Corporate Income Tax.” →

Six questions about HSBC and the Jersey connection

[vc_row][vc_column][vc_column_text]From the BBC in Jersey:

“HSBC is closing all accounts in Jersey for customers living in the UK, as part of industry-wide efforts to check identity and address details, to ensure off-shore accounts aren’t being used to hide money. Jersey’s Chief Minister Ian Gorst insists that banks have to comply with legislation.”

So few words, so much to say about them.

We have at least six questions. Continue reading “Six questions about HSBC and the Jersey connection” →

New study outlines trillions handed out in U.S. corporate welfare bonanza

From Good Jobs First in the U.S., a new study looking at the many and varied grants, tax credits and subsidies harvested by large companies. (Also see our Taxcast interview of Greg Leroy, along with an interview with Kevin Farnsworth, who has done similar work on corporate welfare for the UK.)

The press release for the new report, entitled Uncle Sam’s Favourite Corporations, begins:

Federal “Corporate Welfare” Database Now Online

Study: Large Corporations Dominate Federal Subsidy Awards; Banks, Foreign-Owned Energy Firms and Federal Contractors Among the Biggest Recipients

Two-thirds of the $68 billion in business grants and special tax credits awarded by the federal government over the past 15 years have gone to large corporations. During the same period, federal agencies have given the private sector hundreds of billions of dollars in loans, loan guarantees and bailout assistance, with the largest share going to major U.S. and foreign banks. Continue reading “New study outlines trillions handed out in U.S. corporate welfare bonanza” →

Small countries, big banks: is Andorra the new Cyprus?

Andorra has just over twice the population of Liechtenstein, and looks a little like it too.

Andorra has just over twice the population of Liechtenstein, and looks (and behaves) a little like it too.

Our quote of the day comes from the introductory paragraph of a Reuters story:

“With Andorra now added to the list, how many more examples do we need to see the folly of combining a small country with a large banking system?”

That’s our quote of the day. The lead angle of the story is one of financial stability: it asks if this is Cyprus, all over again. Banking assets in Andorra are over six times GDP, with assets under management worth the equivalent of 17 times GDP. The rating agency Standard & Poor’s has just cut Andorra’s credit rating to two levels above junk. Following in the small-country theme, Reuters also cites:

“those financial crisis examples of Ireland and Iceland, both of whom enjoyed the fruits of wild-west banking for a time only to see it end extremely badly.”

Continue reading “Small countries, big banks: is Andorra the new Cyprus?” →

European Trade Unions Congress on tackling tax evasion, avoidance and tax havens

The European Trade Union Confederation (ETUC) was established in 1973 to represent workers and their national affiliates at the European level. It has just adopted the following resolution on tackling tax evasion, avoidance and tax havens. Continue reading “European Trade Unions Congress on tackling tax evasion, avoidance and tax havens” →

Where did Zimbabwe’s diamond revenues go?

From Tax Justice Network Africa, via its Afritax feed, a video showing a Zimbabwean member of parliament, James Maridadi, taking the Minister of Finance to task on revenue from Marange Diamonds.

The brief exchange is worth watching, not least for the Minister’s evasive manoeuvres. But it’s mostly an excuse for us to draw readers’ attention to an older, fantastic video by Al-Jazeera, who sent a couple of reporters undercover, posing as corrupt Zimbabwean officials with a fistful of diamond dollars, to the exceedingly mucky tax haven of the Seychelles.

Continue reading “Where did Zimbabwe’s diamond revenues go?” →

Pulling the plug: how to stop corporate tax dodging in Europe and beyond

From Oxfam, a new report whose headline we’ve copied. As the introduction notes:

“Making tax fair is one of the key solutions if we want to tackle the growing problem of inequality. Data from 40 countries shows the potential of well-designed, redistributive taxation and corresponding investment by governments to reduce income inequality driven by market conditions.
Finland and Austria, for instance, have halved income inequality thanks to progressive and effective taxation accompanied by wise social spending. Unfortunately, at present, almost all countries suffer from increasingly large scale tax dodging schemes used by big multinationals and wealthy individuals. this deprives all governments of much needed resources to finance essential services, but especially affects developing countries.
The European Union has been at the forefront of the fight against tax dodging over the past five years. Since 2011, several tax reforms have been adopted as first steps towards greater tax fairness. relatively good progress has been made to tackle tax evasion of private wealth (including issues such as automatic information exchange in europe, and transparency of beneficial owners in the anti-money laundering legislation).
However, less attention has been given to putting in place the right legislative measures to tackle corporate tax avoidance, including knowing where companies pay taxes, harmonising tax bases in europe and supporting ambitious reforms at an international level. recent corporate tax dodging scandals have unequivocally reminded us that despite some progress, plenty remains to be done if we truly want ‘banking secrecy to be over’, ‘the end of tax havens’ and a definitive end to tax evasion and avoidance.”

Read on.

In the next taxcast: democracy for sale, via tax havens

Another day, another political party funding scandal.

This time it’s (again!) the UK, and its third largest party the Liberal Democrats. We will start with a quote.

“Tax-haven lobbyists and beneficiaries have captured and corrupted our party political fundraising.”

That’s not us saying it: it’s Donnachadh McCarthy, former Liberal Democrat Deputy Chair. And he should know. On this month’s Taxcast (our monthly podcast, out on March 21) you’ll hear how he tried for years to get the Liberal Democrats to tackle the scandal of party political funding. Until he realised that: Continue reading “In the next taxcast: democracy for sale, via tax havens” →

City of London helps UK ‘betray’ US again: this time it’s over China

A year ago today’s TJN blogger wrote an article for The American Interest magazine entitled Putin, the U.S. and the City of London: The Much-Too-Special-Relationship. It made the bold statement:

“The truth is that the City of London is a greater potential threat to the national security of the United States than almost anyone supposes.”

And it quoted Ben Judah, author of a controversial New York Times article on the subject, as saying:

“Britain is ready to betray the United States to protect the City of London’s hold on dirty Russian money. And forget about Ukraine.”

Well, in that episode the angry words were largely confined to the media. Now we have another episode where the U.S. government is getting involved directly, pointing out that the City of London seems to have led the UK away from its traditional alliance with the United States.

It is just as we predicted then, and continue to predict. This time, it’s not Russia but China. Continue reading “City of London helps UK ‘betray’ US again: this time it’s over China” →

What is Competitiveness? #1 Robert Reich

Poverty – a bad money-laundering risk factor

New Report: Ten Reasons to Defend the Corporate Income Tax.

Thank you!