For those of you who haven’t already read Treasure Islands, this recent headline in The Times might come as a shock. The article itself is behind a pay wall, though the jist is easily http://healthsavy.com captured: the head of Britain’s National Crime Agency, Keith Bristow, has warned that London is a global centre for criminal financial activity. What took him so long to discover this? Continue reading “Quelle Surprise! billions laundered daily through the City”
The following press release was posted this afternoon by Sven Giegold MEP: Continue reading “Luxembourg Leaks: EU Parliament Inquiry Committee a matter of political will”
In the run-up to the general election in the UK this May, a campaign is underway to persuade ALL candidates from ALL political parties to engage in a race-to-the-top to ensure fair and effective corporate taxation. Continue reading “Support a Tax Dodging Bill”
Former South African president Thabo Mbeki panel has presented the findings of his panel to the African Union summit, where they were adopted directly into the declaration. Now, we’re biased for all sorts of reasons (more on that below), but this is an historic moment – and probably the most important report yet produced on this issue. Continue reading “The Mbeki panel on illicit financial flows: Africa leads the way”
UPDATE: The report of the High Level Panel on Illicit Financil Flows chaired by President Mbeki was adopted by the African Union Summit meeting on 31st January 2015. This represents a major milestone for the global tax justice movement. Campaigners throughout Africa can now push their governments to implement the many measures identified by the report. Similarly, campaigners in non-AU countries, especially in Europe and North America, can put pressure on their governments to take strong action against OECD based secrecy jurisdictions and against the large community of multinational businesses and investors who avoid and evade tax in African countries. Tax Justice Network is proud of its contribution to the varied processes that have led over a number of years to the adoption of this report. Continue reading “Mbeki Report On Financial Crime Will Shift Global Tax Debate, Says Christian Aid”
From Gabriel Zucman, an image enhanced by David Walch of Attac-Austria:
Source: Gabriel Zucman; tinyurl.com/njy2al2. (NB Bermuda isn’t in the Caribbean, but in the North Atlantic.)
Juncker, of course, has denied responsibility for his role in Luxembourg’s tax haven activities such as the Luxleaks scandal. In his role at the head of the European Commission it’s politically important for him to say this. But this graph, we think, tells an important story.
January 2015
The Tax Justice Research Bulletin is written by Alex Cobham
This is the inaugural Tax Justice Research Bulletin, the first of a monthly series dedicated to tracking the latest developments in policy-relevant research on national and international taxation. This issue looks at a new paper using the longest series of tax data that exist for any one country (challenges to this very welcome!), and an article on property taxation in Africa. The Spotlight section focuses on inequality and redistribution – including an important study from UN-DESA, Joe Stiglitz’s take on Piketty, and answers to that question you’ve been quietly pondering: just how much could you tax the 1%? Continue reading “The Tax Justice Research Bulletin – 1(1)”
TJN’s John Christensen joins up with almost 70 other economists and academics in the following letter backing the Tax Dodging Bill proposal published in The Times today: Continue reading “Economists and academics back the Tax Dodging Bill”
The quote of the day comes from the widely read financial blog Stumbling and Mumbling, via FT Alphaville, and it goes like this:
“Bankers go home with big money for the same reason zookeepers go home with shit on their boots: if there’s a lot of stuff around, some of it will stick to you.”
And that could apply to offshore finance, of course. And accountancy. And . . .
There’s more to high remuneration than this, of course: read on.
From the Oxfam blog:
The corporate tax rules we live with today are from a by-gone era and remain essentially unchanged since the 1920s, from a time when world trade was less than 1 percent of what it is today, a time when companies “resided” very clearly in one country and “sourced” from another, a time when the digital economy didn’t exist and it was much more difficult to manipulate your companies’ activities to take advantage of different tax regimes to pay less tax.
Today’s multinationals can exploit yesterday’s tax system to shift profits and dodge tax. Big companies are running rings around the current tax system. And our government leaders are letting them get away with it.
Countries not companies
It’s countries, not companies, that need to do the job of re-writing the global tax rules. To some extent, that work has already begun. Oxfam has welcomed global efforts to reform the international tax system. But current efforts don’t go far enough. Under the current reform process, not all countries have a say, big companies have too much influence and countries that are effectively tax havens – like Luxembourg – are given a seat at the negotiating table. Would you let a tobacco company write cancer prevention policy? Would you let a fast food chain write healthy eating policy? Will we let tax havens make new global tax rules even less fair?
At the same time, developing countries – which may lose $100 billion a year from tax dodging and generous tax incentives – aren’t given an equal voice in the negotiations under way to rewrite the tax rules. This means that current talks exclude more than a third of the world’s population. That’s why Oxfam is calling for a World Tax Summit, where all countries are invited and where the rights and needs of citizens are prioritised over the profits of corporate giants. We can’t make tax fair if the journey to change isn’t fair. That journey must begin with a truly inclusive World Tax Summit.
Read more here.
CLICK TO ENLARGE: This chart of capital out- and inflows to Greece tells a crucial story about where it all went wrong in the past. Look carefully at the tax havens in the inner circle
From the Guardian’s letter page:
Your news, editorial and speculations about Syriza’s victory might now be followed by an analysis of where Greece’s past decades of wealth, present revenues, EU grants, loans and gifts have gone. Continue reading “Greece’s swamp of offshore corruption”
Apply to TJN’s Illicit Finance Journalism Programme
We are delighted to issue a call to journalists and campaigners to attend the fifth Illicit Finance Journalism Programme (IFJP).
TJN’s financial investigative journalism training course takes place in London between Tuesday 12 May – Friday 15 May 2015 at City University London, Northampton Square, EC1V 0HB Continue reading “Apply to TJN’s Illicit Finance Journalism Programme”
29th January 2015 – UPDATE: Here is a copy of the civil society response to the Financing for Development ‘Elements’ paper that acts as the starting point for the first drafting session today in New York.
Guest blog from Christian Aid’s Dr Matti Kohonen in New York
Snow blizzard was gathering around the UN building just on the eve before the first Drafting Session for the Financing for Development (FFD) talks in New York January 27-29 and the UN exceptionally had to shut down for the first day as a “state of emergency” was called by the New York Mayor De Blasio over the storm.
However, snow wasn’t the only source of concern as the UN is also snowed under by the demands from developed countries who still think that financial issues are not in the domain of the UN.
Leaving the financial issues outside of UN institutions makes no sense as the Sustainable Development Goals (SDGs) to be agreed in September 2015 will require an estimate €2.5 trillion in new financial resources per year in developing countries[1], while the unmet financing demands to adapt and mitigate climate action also rise to hundreds of billions of dollars.
How can the UN deliver on ambitious goals on inequality and climate change without institutions that ensure predictable financing?
If the period from the last FFD summit in Doha in 2008 has taught anything it is that ignoring systemic issues around tax dodging, secrecy jurisdictions or opaque private finance won’t help developing countries any more than developing countries. It is the lack of attention to these issues that led to the global financial crisis and its catastrophic aftermath in terms of the impact on many developing countries.
The discussions on the FFD started with the publishing of the Elements Paper[2] on the 22 January, laying out the structure of discussions and key questions for member states. The worry of civil society is that it does depart from the Monterrey Consensus of 2002 and Doha outcomes of 2008 in important ways. Similar changes were already visible in the expert commission report on sustainable development financing[3] and the UN secretary General’s report on post-2015 and financing for development[4], but now they are confirmed.
For instance, domestic private resources are to be discussed together with international private finance rather than domestic public finance. This could be interpreted as domestic private resources no longer being seen as part of the sovereign policy space of developing countries, but as an extension of global financial markets. On the positive side, a greater focus on illicit financial flows in the domestic resource mobilisation chapter shows the centrality of tax and financial secrecy issues on the FFD agenda.
A whole new chapter is given to the role of a ‘data revolution’, but most of the new data is to be from developing countries budgets and development outcomes, rather than secrecy jurisdictions or the accounts of multinational corporations. This raises concern over the integration of the financial transparency agenda in the FFD process – while illicit financial flows are mentioned as a resource for development the ‘data revolution’ seems to miss this area of data.
There is a general positive recognition that the FFD process is more integrated this time around to other processes – namely the Sustainable Development Goals (SDGs) and sustainable development issues emerging from the Rio Earth Summit of 1992 and the subsequent Rio + 20 principles. But integration of new areas does not mean reinventing the wheel – rather continuity and relevance are key in keeping the wheel turning in tackling difficult issues around financial resources.
Just as Mayor Bill de Blasio asked New Yorkers to “prepare for something worse than we have ever seen before”[5], so should the co-chairs of FFD process Mr George Talbot of Guyana and Geir Pedersen of Norway as co-chairs prepare UN member states for worse storms and greater inequality that lies ahead unless all forms of financing for development are scaled up – and especially tax as the most certain of all resources.
Then the (snow)ball is with the member states, and as the snow ploughs work their way through and opening the avenues and streets for genuine dialogue over new initiatives such agreeing on an intergovernmental UN tax body at Addis Ababa.
[1] http://unctad.org/en/publicationslibrary/wir2014_en.pdf , http://unsdsn.org/resources/publications/financing-for-sustainable-development/
[2] http://www.un.org/esa/ffd/wp-content/uploads/2015/01/FfD_Elements-paper_drafting-session.pdf
[3] https://sustainabledevelopment.un.org/content/documents/4588FINAL%20REPORT%20ICESDF.pdf
[4] http://www.un.org/ga/search/view_doc.asp?symbol=A/69/700&Lang=E
[5] http://www.usatoday.com/story/weather/2015/01/25/northeast-possibly-historic-blizzard/22310869/ ?
Continue reading “Financing for Development talks snowed under in New York”
From an article by UK journalist Paul Mason, published on the eve of the Greek vote:
“As for the Greek oligarchs, their misrule long predates the crisis. These are not only the famous shipping magnates, whose industry pays no tax, but the bosses of energy and construction groups and football clubs. As one eminent Greek economist told me last week:
“These guys have avoided paying tax through the Metaxas dictatorship, the Nazi occupation, a civil war and a military junta.”
They had no intention of paying taxes as the troika began demanding Greece balance the books after 2010, which is why the burden fell on those Greeks trapped in the PAYE system – a workforce of 3.5 million that fell during the crisis to just 2.5 million.”
Continue reading “Quote of the day: tax-evading Greek oligarchs”
Today a coalition of 17 UK organisations including TJN, ActionAid, Oxfam, Christian Aid, the NUS and the Equality Trust is launching a campaign to tackle the scandal of corporate ta avoidance in the run-up to the next UK general election in May. Continue reading “UK campaigners call on political parties to adopt tax dodging bill”
From Fortune Magazine, an investigation into Luxembourg’s shady corporate dealings:
“The mailbox marked AIG/Lincoln—the name of a partner of the New York–based insurance and real estate giant AIG—is empty and unlocked. Moments later, in the company’s fifth-floor office, I meet AIG/Lincoln’s employee (introduced as the sole one), who, as it happens, also works for the roughly 30 other companies housed in the modest suite.
When I ask how one works for dozens of bosses, the response is, “It is not very hard. There are no activities here.”
No earth-shattering news here: just a reminder of what really happens in tax havens, or (if you prefer) secrecy jurisdictions.
More on how Luxembourg became a tax haven, here.
The U.S., viewed from space
Update – Jan 2021 – Historic new U.S. legislation overturns the U.S.’ secret shell company legislation, weakening (though not eliminating) the U.S.’ status as a secrecy jurisdiction.
Update – April 2020. New research based on classified documents reveals an untold and previously secret history of how civil servants in the UK, in partnership with bankers (while excluding law enforcement officials) tailored US-devised money laundering policies to suit the needs of Britain’s financial services industry.
Update – March 2019 – The EU should blacklist the US as a tax haven. Oxfam America.
Update – March 2019 – Russian-Style Kleptocracy Is Infiltrating America. The Atlantic. “New York, Los Angeles, and Miami have joined London as the world’s most desired destinations for laundered money. This boom has enriched the American elites who have enabled it.”
Update – April 2018. Corporate Secrecy Fuels Human Trafficking in United States. Polaris.
Update 13 – Jul 2017 – The U.S. Is a Good Place for Bad People to Stash Their Money in The Atlantic – ‘America vows to promote financial transparency, yet it will let just about anyone register an anonymous shell company’
Update 12 – Jun 2017 – FATCA reciprocity watch: on US single-person LLCs, and more.
Update 11 – Jan 2017: The U.S. hasn’t signed the AEoI Agreement: Reciprocity demanded. Switzerland demands that the United States be less of a tax and secrecy haven.
Update 10, May 2016 – US tax havens – the new Switzerland (Financial Times). “I think the US is already the world’s largest offshore centre”.
Update 9, April 2016: How the U.S. became one of the world’s biggest tax havens – Washington Post.
Update 8: now in The Economist.
Update 7: See also this Bloomberg story entitled The World’s Favorite New Tax Haven Is the United States
Update 6: Jan 2016 – TJN calls for Fatca-like withholding taxes against financial institutions from USA and other financial centres.
Update 5: see our narrative report on how the United States became a secrecy jurisdiction. Also see Tax Analyst’s U.S. Ranks As Top Tax Haven, Refusing To Share Tax Data Despite FATCA
Update 4: see this Oct 2014 technical article entitled Hiding in Plain Sight: how non-US persons can legally avoid reporting under both FATCA and GATCA.
Update 3: more details on U.S. roadblocks from Value Walk, here.
Update 2: more details from Allison Christians, here, from 2013.
Update: Naked Capitalism in the U.S. has published an adapted version of this article, here.
If people stash their wealth or earn income overseas, that is fine with us — just as long as their tax authorities get the information they need to tax that wealth or income according to the law, and as long as money laundering and financial crimes can be effectively tracked, and so on. Where there are cross-border barriers to the instruments of democratic societies, then there is an offshore problem.
The only credible way to provide the necessary information is through so-called automatic information exchange (AIE), where governments make sure the necessary information is available across borders, as a matter of routine.
For years we at the Tax Justice Network were ridiculed for advocating AIE: pie in the sky, many people said. The OECD, the club of rich countries that dominates international rule-making on tax and tax-related information sharing, was for years pushing its so-called Internationally Accepted Standard which was, well, the internationally accepted standard for cross-border information exchange, despite being only slightly better than useless. The message was that we should just accept this, and move on.
How the world has turned since a couple of years ago. Continue reading “Loophole USA: the vortex-shaped hole in global financial transparency”
Click to enlarge. (Image: Actionaid)
ActionAid has just published a new report entitled Close the Gap! The Cost of Inequality in Women’s Work, which does that it says on the tin. It’s not just about tax, of course, but it contains much that is of interest to us.
Continue reading “New report: women, tax and economic inequality”
In the January 2015 Taxcast: how offshore is ruining the ‘Beautiful Game’: the Taxcast scrutinises football’s own goal. Also: how banks with criminal convictions are being allowed to continue to handle our money, how people may be allowed to apply for anonymity in the UK’s new register of beneficial owners of companies to be introduced in 2016, and the meeting of the world’s most powerful in that bastion of transparency, Davos, Switzerland. Plus more scandal and unique analysis.
“if we’re shifting competition away from the athleticism, the skill, the talent of the players and into the skill and talent of accountants, lawyers, bankers and board room executives, then the sport becomes a pointless thing to go and watch.’
George Turner
Featuring: John Christensen and George Turner of The Tax Justice Network, and Richard Murphy of Tax Research UK. Produced and presented by @Naomi_Fowler for the Tax Justice Network.
Download on your phone/tablet to listen offline here:
Listen and share via Youtube: http://youtu.be/1Sma2Slvh9o
Also available on iTunes: https://itunes.apple.com/gb/po
We just wrote a blog about tech giants, via a Financial Times article suggesting that they risk suffering reputational damage that could eventually be as bad as the reputational damage suffered by big banks.
Well, there’s another category that risks suffering the same fate in future. The Big Four Accountants.
This video from Spinwatch is from 2013, but it is worth repeating because not much has changed: in fact, we reckon that matters have got even worse since then. Continue reading “Who runs this place? ‘Policy development’ and the Big 4”
One might think that if a government wanted to impose austerity, its appetite for tax collection would rise. But this may not be the case. Take a look at this study from the European Federation of Public Services Unions (ESPU,) which came out last October but remains relevant. It’s called The Impact of Austerity on Tax Collection: One Year Later and Still Going Backwards.
And the key point is in the first summarising paragrah: Continue reading “Austerity: the tax dodgers’ best friend?”
Earlier this month Bloomberg reported that the European Union had stated that:
“Luxembourg hastily approved a “cosmetic” tax deal with Amazon.com Inc. in 11 days, allowing the company to shift profits to a tax-free unit. The EU told Luxembourg officials in a letter that the deal, based on a “cosmetic arrangement,” gives the Internet retailer an unfair advantage over competitors and doesn’t comply with global standards.”
In following analysis, originally posted here, guest blogger Dimitrios Kyriazis of University of Oxford examines the substance of the advance tax agreement struck between Amazon and Luxembourg and the problem this agreement poses for market competition in the European Union. Continue reading “Luxembourg, Amazon, and the State aid connection”