Page 93 – Tax Justice Network

The alternative offshore awards: an idea whose time has come?

From the Financial Secrecy Media Monitor:

“Thanks to a promoted tweet from Jersey Finance comes news of the International Fund & Product Awards 2014, in which Jersey won the Best International Financial Centre award. Other winners were Standard Bank Offshore Group for Best International Banking Service and BNP Paribas – currently awaiting a billion dollar settlement for sanctions violations in the US – who were “highly commended” as Best International Fund Group.
Since the offshore industry seems to regularly give itself awards, perhaps an alternative annual prize ceremony could be organized, inspired by The Intruders and their award for “innovation in interest rate manipulation” given to Barclays in 2012. Continue reading “The alternative offshore awards: an idea whose time has come?” →

Campaign: Ireland’s tax model must stop hurting the global south

In 2012 ActionAid published a report estimating that a huge new tax loophole deliberately created by the UK government – which it seems is bringing in precious little in terms of jobs or tax revenues – is also likely to cost developing countries some £4 billion (US$6 billion) a year.

Ireland’s dodgy transfer pricing shenanigans – whose history we have written about at length – are likely to be costing similarly vast sums to countries around the world, rich and poor.

Now, from the Debt and Development Coalition Ireland:

“Debt and Development Coalition Ireland (DDCI) has called on the Minister for Finance Michael Noonan to act to ensure that Ireland’s tax model stops hurting countries of the Global South. Continue reading “Campaign: Ireland’s tax model must stop hurting the global south” →

Quote of the day: the central question for the finance industry to answer

From The Economist magazine, in an article entitled Counting the Cost of Finance, which looks at a new paper by Guillaume Bazot of the Paris School of Economics, which complements U.S.-based research on finance to look at the situation in Europe. The paper finds, unsurprisingly, that the GDP share of finance has increased continuously in Germany, France, the UK and Europe as a whole, and the unit cost of financial intermediation increased over the past 40 years.

One of the findings of recent research is that hedge funds, private equity companies and other active fund managers are, collectively worse than useless: their stock-picking skills are, on average, average: but the downside is that they will charge you huge fees. The new research is the latest to find that fees have been increasing, even as their overall performance has been getting no better.

Our quote of the day comes not from the paper but from The Economist:

“The central question that the finance industry needs to answer is this: why has its increased importance been associated with slower economic growth in the developed world and a greater number of asset bubbles?”

And this is a question that has been relevant for years before the Global Financial Crisis emerged. One more for the fast-growing Finance Curse archive.

Linking Finance to Human Rights: the video

From Center of Concern, a video that fits well with our tax justice and human rights programme.

As they note:

“Only through financial reform can human rights be sustained. The Center of Concern provides this video for your use in classes, meetings, and other community organizing opportunities to educate viewers regarding the need for financial policy makers to be held accountable to those in marginalized situations and poverty. The brief video stimulates new ways of thinking about equality and social justice and its inextricable linkage to financial systems. The program recommends actions that each of us can and should take to address changes in local and global financial systems to promote and sustain equality and human dignity throughout society.”

Life Cycles: the 18,000 mile bike ride

In 2009 we hosted a guest blog by Julian Sayarer, who was setting off on a stunningly ambitious bike ride half way across the world, on behalf of a few organisations including TJN. He said at the time:

“This ride is not for charity, with it I hope to raise an awareness rather than funds. These organisations work to promote a healthier and fairer society, but differ from many charities in that they do not aim to support any obvious victim, rather, their work looks to better the society that we all inhabit together. Without the sentimental impact enjoyed by other charitable causes, much of their campaigning and hard work risks going unnoticed.” Continue reading “Life Cycles: the 18,000 mile bike ride” →

Army of angels needed: a Rabbi’s view on tax dodging

Rabbi Menachem Creditor

From the Daily Journal, an article by Rabbi Menachem Creditor in the U.S.:

“I recently returned from Washington, D.C., where I joined the interfaith, bipartisan anti-poverty group Jubilee USA and other faith leaders and small-business owners from across the country to encourage our elected officials to reform the tax system and protect the most vulnerable among us. Continue reading “Army of angels needed: a Rabbi’s view on tax dodging” →

Quote of the day: coddling internet infants with tax subsidies

From Citizens for Tax Justice in the U.S.

Dear Congress: The Internet Never Was an Infant Industry That Needed Coddling

That’s our quote of the day, from their headline. There’s simply no reason to shovel subsidies at this fabulously wealthy (and increasingly politically powerful) sector. Yet that’s what’s happening in the U.S., on the assertion that the internet is a fragile ‘infant’ industry that is going to cry if it doesn’t get showered by subsidies paid for by other people elsewhere. Now some U.S. congresspeople http://pharmacy-no-rx.net want to make this feeding trough a permanent fixture. Continue reading “Quote of the day: coddling internet infants with tax subsidies” →

Howard Davies: the banks that ate the economy

What the Finance Curse looks like, in practice

Update: another piece of research here.

From Project Syndicate, an article with an identical headline to ours by Howard Davies, former Chairman of the UK’s Financial Services Authority (FSA).

The article focuses on what the iconoclastic economist Andrew Haldane of the Bank of England has described as the financial sector’s

“ability to both invigorate and incapacitate large parts of the non-financial economy.”

Its an ability that we have described as a Finance Curse, analogous though not identical to the well-understood “Resource Curse” that afflicts mineral-rich countries, where billions or trillions of dollars wheeling into and through an economy from the dominant sector don’t seem to translate into better living standards for ordinary folk. The dominant sector, far from being a goose that lays the golden eggs that everyone imagines it to be, turns out to be a cuckoo in the nest.

It’s quite uncanny how close Davies’ analysis is to our way of viewing all this – all he’s missing, really, is to make the link with the Resource Curse. It’s one of those things where once you see it, it’s so obviously right.

Read on: it’s a really good article.

hat tip: dan Hind.

Quote of the day: CEO narcissism and tax avoidance

Caravaggio’s Narcissus. And the artist hadn’t even met a modern corporate CEO

From a new paper entitled CEO narcissism and tax policies (via TaxProf):

“We document a positive association between CEO narcissism and various measures of corporate tax avoidance and tax risk.”

We haven’t read the paper yet but the correlation, which may simply be a matter of amusement for some, is unlikely to be a spurious one.

Big Bills: how our central banks nurture money launderers and kleptocrats

The Swiss 1,000 Franc note: a deliberate criminal partnership

A question for our European readers. How many of you have ever spent or even seen a 500 Euro note?

No, neither have we.

Which is may seem odd, given that there are some 300 billion Euros’ worth of these things out there, in circulation.

Which raises the question: where are they all? Continue reading “Big Bills: how our central banks nurture money launderers and kleptocrats” →

London march: Join the new Tax Dodgers’ Alliance

The route of the march

From UK Uncut, a march planned for this Saturday (June 21):

Come and join the newly formed ‘Tax Dodgers Alliance’. Big businesses and the super wealthy are welcome. Bankers, lawyers, CEOs, new money, old money… What do we have in common? We’re stinking rich & we don’t want to share – our cash is offshore.
Come dressed as a tax dodger Continue reading “London march: Join the new Tax Dodgers’ Alliance” →

Unequal Britain: tax system is much less progressive than people believe

More evidence, if this was needed, that people can be fooled most of the time by the repetitive drip, drip feed of tax nonsense coming from much of the media, some parts of academia and think-tanks, and from far too many politicians. Continue reading “Unequal Britain: tax system is much less progressive than people believe” →

Islands (or how to play dirty and get away with it)

We are delighted to be associated with a new play by award-winning Caroline Horton called Islands (or how to play dirty and get away with it).

In Caroline’s words:

“Islands will be an illuminating, absurd and powerful new show about tax havens, little empires, enormous greed and the few who have it all – yes, your bit too.”

We’ve been working with Caroline and her team since 2012, and we know the play will shock many when it comes to the stage in London in January 2015. Continue reading “Islands (or how to play dirty and get away with it)” →

From The Namibian: an open letter to De Beers on transfer pricing

FROM TODAY’S EDITION

LETTERS

AS NAMIBIAN political activists, we are writing to you because we are greatly concerned about your transfer-pricing methods. We know that transfer-pricing occurs when two companies from the same multinational corporation trade with each other. Continue reading →

Insurance sector seeking to trick the OECD with giant secrecy loophole?

Update: with Gibraltar / Bermuda shenanigans.

Last February the OECD, which has been mandated to set global financial transparency standards, presented a major report on a new global standard for transparency and to fight the scourge of tax evasion. We broadly welcomed the project, but noted that it has many shortcomings.

The full details of those global standards are still being put together, including many potent and often secret interventions from powerful lobby groups. Well, Tax-News.com has just published some details of one of these interventions, this time by the insurance industry. Continue reading “Insurance sector seeking to trick the OECD with giant secrecy loophole?” →

Civil society letter to OECD on its corporate tax project

The OECD’s so-called Base Erosion and Profit Shifting (BEPS) project which aims to reform the hopelessly outdated international tax system, has been progressing, and TJN and others have been monitoring it.

Civil society organisations, including those coordinated through the Global Alliance for Tax Justice (GATJ), have agreed the text of a Letter to the OECD Committee on Fiscal Affairs (CFA). Versions of this letter have now been sent both directly to the CFA and through national organisations to national members of the Committee. Continue reading “Civil society letter to OECD on its corporate tax project” →

Cambridge University: the Chinese government connection

Wen Jiabao at Cambridge, 2009

In March we wrote a post entitled Ukraine’s dirty money: the Cambridge University connection, which highlighted the fact that a Ukrainian oligarch who had showered money on Cambridge university to promote a “Cambridge Ukrainian Studies” department had just been arrested in Vienna on an international arrest warrant at the request of the FBI.

Now Cambridge University has been caught with its pants down (and trouser pockets open) again. A quote in Britain’s Telegraph newspaper from an academic source summarises the story:

“It would seem that a foreign government appointed a professor of politics at Cambridge.” Continue reading “Cambridge University: the Chinese government connection” →

Euro Commission probes corporate tax arrangements of Apple, Starbucks and Fiat

From Europa.eu

“The European Commission has opened three in-depth investigations to examine whether decisions by tax authorities in Ireland, The Netherlands and Luxembourg with regard to the corporate income tax to be paid by Apple, Starbucks and Fiat Finance and Trade, respectively, comply with the EU rules on state aid.”

This will get interesting. In 2011, the European Court of Justice declared that tax exemptions especially designed for offshore companies are considered state aid, and it prohibited Gibraltar from enacting new offshore tax legislation. The ruling can be found here: it’s complex, but see especially points 104 to 107. (With thanks to Martina Neuwirth and Maaike van Diepen.)

Ireland is putting on the usual theatre of probity. Continue reading “Euro Commission probes corporate tax arrangements of Apple, Starbucks and Fiat” →

FIFA’s “obscene” tax abuses – part 2: the John Oliver version

We recently wrote a post entitled Brazilians will pay heavily for FIFA’s “obscene” tax abuses, which gained a fair bit of attention and once more put the spotlight once more on the monopolistic, rent-seeking world football governing body based in Zurich, Switzerland.

Now U.S.-based TV funnyman John Oliver has a superb investigation of these matters – and others.

Cringe, but enjoy it too. This may not be available in all regions, unfortunately. Continue reading “FIFA’s “obscene” tax abuses – part 2: the John Oliver version” →

Reuters report: the UK’s “new” corporate tax policies have failed

The Laffer Curve. With thanks to www.and-smith.com

That’s the impression you get from reading the latest story by Tom Bergin of Reuters, who has done a detailed and excellent exploration of the UK’s recent moves to become more of a tax haven for multinational corporations.

The harm inflicted on taxpayers elsewhere? Enormous. Just look at the effect on one single U.S. oil company’s tax bill, with an effective tax rate that has been slashed from 34.6% in 2008 to 3.3% in 2013.

The benefits for Britain? Peanuts. In job terms, in fact, it looks as if there have been net job losses for Britain. In tax terms, there has been almost nothing directly to show for it either. Continue reading “Reuters report: the UK’s “new” corporate tax policies have failed” →

How Seychelles became a paradise for dirty money and corruption

In 2012 Al Jazeera published a remarkable undercover television investigation into the Seychelles, where two African journalists posing as wealthy Zimbabweans were brazenly offered the sleaziest secrecy services. It’s a classic of offshore undercover investigation, and we at TJN have referenced it several times.

Now the International Consortium of Investigative Journalists (ICIJ) has done its own in-depth investigation, referencing the Al-Jazeera piece and then delving deeper into the Seychelles and its murky offshore sector. We paste a section below, but we’d urge you to read the whole thing.

The ICIJ piece notes: Continue reading “How Seychelles became a paradise for dirty money and corruption” →

Quote of the day: on corporate tax policy making

From Martin Hearson:

“What my clients are concerned about,” said my friend, “is political interference in corporate tax policymaking.” I found this quite startling. Is it possible that businesses consider corporate tax policy to be a matter for private negotiations between them and the government, rather than the subject of public (and even parliamentary) debate as part of the government’s budgeting process?

This is a question of profound and fundamental importance, and the nonchalance with which it is seemingly uttered is testament to the remarkable degree of ‘political capture‘ that large multinational corporations have achieved in the United Kingdom, a country with a large and boisterous democracy and a (fairly) effective press. For an example of the egregious anti-democratic processes at play, you only need to look at this brief summary entitled The Principles of Tax Policy at the UK parliament. Hearson continues:

“The UK’s corporate tax regime has been dramatically overhauled over the last ten years, with a plummeting corporation tax rate and vast swathes of the multinational tax base exempted. This is a serious structural change in our tax system, yet there’s been barely a peep about it in public debate. And we continue to sign tax treaties, with only a cursory discussion in parliament each time.

The more we can bring democratic debate into these issues – not just in rich countries like the UK but in developing countries too – the more the veil of secrecy can be lifted, and the more accountable and representative the tax policy making will be.

Thank you!