In this guest blog Professor John Weeks, author of Economics of the 1%, explores the assumptions behind the idea that key public services, 
including education and pension provision are unaffordable. Continue reading “The Fallacy of Public Sector Affordability”
Tax Justice and Human Rights
From the book everyone’s talking about, Thomas Piketty’s Capital in the 21st Century, a review by Paul Krugman in the New York Review of Books:
“Why does inherited wealth play as small a part in today’s public discourse as it does? Piketty suggests that the very size of inherited fortunes in a way makes them invisible: ‘Wealth is so concentrated that a large segment of society is virtually unaware of its existence, so that some people imagine that it belongs to surreal or mysterious entities.’ ” Continue reading “On Piketty, mathematical silliness, inherited wealth and mysterious entities”
From Britain’s Telegraph newspaper, an article entitled Cool London is dead, and the rich kids are to blame:
“Tax empty houses? Why, no. We wouldn’t want to upset some ex-KGB thug who looted the Kazakh treasury in the mid 1990s. We wouldn’t want to annoy a banker who “honestly” didn’t know he was investing the Mexican cartels’ blood-soaked wealth.” Continue reading “Quote of the day: offshore London”
T
he BEPS Monitoring Group, which TJN took the lead in establishing last year in the wake of the OECD’s ground-breaking initiative, has just published this report: BMG Submission to OECD on Transfer Pricing Comparability Data and Developing Countries.
This report responds to the OECD Report on this subject of 11th March 2014, prepared at the request of the G20. Its findings are summarised below:
Continue reading “Submission to OECD on transfer pricing and developing countries”
The Guardian has published an article, picked up by media across the world, about the NGO follow-up to revelations in 2011 that the European Investment Bank had lent money to the Zambian firm Mopani Copper Mines (a.k.a. Glencore) which avoided paying tens of millions of dollars in local tax.
At that time the EIB suspended loans to Glencore and announced an investigation into the company’s activities. Three years later the silence from the EIB has become deafening and, as The Guardian reports, 11 NGOs including TJN Africa and our colleagues at the Global Alliance for Tax Justice have written to EIB’s president Werner Hoyer, demanding the release of their report. In their words:
“It is now close to nine months since Christian Aid made a formal complaint to the bank about its failure to publish the Mopani-Glencore report. Despite having had this considerable period of time, the bank still has not replied to the complaint. We consider this an inexplicable and unacceptable delay.”
The original allegations about tax avoidance arose from a leaked audit report commissioned by the Zambian Revenue Authority from accountants Grant Thornton and consulting firm Econ Pöyry which identified “unexplainable” increases in the mines’ operational costs between 2006 and 2008. The effect of these cost increases was to reduce the profits booked in Zambia and lower the corporation tax liability. This appears to be a standard use of trade mispricing techniques.
It is hard to construe the EIB’s three year delay in reporting back on the findings of its investigation in any light other than their refusal to be accountable to the wider public good. As our colleagues at TJN Africa comment, the EIB’s stance is:
“characteristic of the hypocritical nature of western financial institutions such as the EIB who in one breath preach transparency but in another show no real and genuine commitment to practise these principles”
Two major reports are worth highlighting here. First, and most recently, from the U.S. Permanent Subcommittee on Investigations (via Senator Carl Levin), a report on tax avoidance by U.S. multinational Caterpillar:
“Caterpillar Inc., an American manufacturing icon, used a wholly owned Swiss affiliate to shift $8 billion in profits from the United States to Switzerland to take advantage of a special 4 to 6 percent corporate tax rate it negotiated with the Swiss government and defer or avoid paying $2.4 billion in U.S. taxes to date, a new report [PDF] from Sen. Carl Levin, the chairman of the U.S. Senate Permanent Subcommittee on Investigations shows.” Continue reading “Reports: the sorry state of U.S. tax dodging multinationals”
Swissinfo is running a long article today which begins like this:
“The decision by Luxembourg and Austria to automatically exchange tax data with other European Union countries has isolated Switzerland in the global crusade against banking secrecy, a Tax Justice Network (TJN) expert tells swissinfo.ch.”
It contains much that will be new, even to readers of this blog, on the subject of automatic information exchange, tax evasion, global tax haven policy, and much more.
A briefing paper on the cost of tax evasion worldwide, 2011.
Highlights:
Read the paper here. We are republishing it today, so as to add it to our reports page.
From Responsible Investor, a story about a shareholder resolution about Google’s tax strategies has been placed by a group of responsible investors onto the agenda of its forthcoming annual shareholder meeting.
“The proposal calls on the company’s board to “adopt a set of principles to address the impact of Google’s tax strategies on society, with particular focus on Google’s employees, customers and suppliers”. Continue reading “Shareholders to get chance to vote on Google’s tax policy at AGM”
Adapted from an email from Tove Maria Ryding, Eurodad:
Good news from Tanzania – the Public Accounts Committee there has kicked off an inquiry on tax evasion and avoidance, amid severe concerns about illicit financial flows and capital flight. We might have some interesting times ahead:
“During inquiry some large tax payers and multinationals will be summoned to be appear before PAC and respond to queries from members.” Continue reading “Tanzania: parliamentary inquiry on tax abuses, tax havens, illicit flows”
This new book adds further insights into the political economy of offshore, raising questions about why offshore has been off-limits for serious 
political discussion for so many decades and opening up discussion around offshore secrecy. A welcome addition to the emerging debate. Continue reading “New book: The Political Economy of Offshore Jurisdictions”
From Citizens for Tax Justice in the U.S.
New “Corporate Tax Explorer” Site Details What Fortune 500 Companies Pay in Corporate Taxes
A new web tool, the Corporate Tax Explorer, from Citizens for Tax Justice (CTJ) and the Institute on Taxation and Economic Policy (ITEP), is a one-stop shop for all the state and federal data we analyze on corporate taxes. Just search for a company by name or browse the list of companies to get detailed information on what the company paid in federal, state and foreign corporate income taxes, as well as information about offshore holdings and various tax breaks.
Check out the New Site
It would be nice to see similar things emerge in other countries, although it’s clear that in many countries the same level of information simply isn’t available.
Last year our colleagues at New Rules for Global Finance published a ground-breaking report on the governance and accountability of the leading 
financial rule-setting institutions, including those covering international tax cooperation such as the G20, the OECD, the UN Tax Committee and the IMF. Their report is available here. Continue reading “Event: Is global governance of finance fit for purpose?”
Published without commentary.
Philippe Lamberts
From SOMO, an article about how financial sector interests have sabotaged European efforts to regulate the shadow banking sector. Our quote of the day, one in an occasional series, is from Belgian Green MEP Philippe Lamberts, who accused other MEPs of ‘delaying tactics’ and said:
“I am not a finance person but I know enough to tell truth from bullshit. As a legislator, surrendering to the bullying of the industry, I won’t take it.” Continue reading “Quote of the day: finance, truth and bullsh*t”
From the Financial Times:
“Brussels has stepped up its probe into alleged illegal sweeteners offered to multinationals by expanding the investigation to cover arrangements for patent-holders and ordering Luxembourg to reveal its promises to specific companies. Continue reading “EU steps up probe into tax haven activities. Hit ’em hard”
This edition of Tax Justice Focus is guest edited by Richard Murphy, the originator of the idea of country-by-country reporting. A little more than a decade after he first began to develop the concept, Murphy has brought together authors from the Organisation for Economic Co-operation and Development (OECD), from the Confederation of British Industry (CBI), from Global Witness and from the European Network on Debt and Development. Together they present a unique picture of the current state of the campaign for country-by-country reporting throughout the world.
In his contribution Joseph L. Andrus of the OECD summarises the contents of the organization’s ‘Draft Discussion Document on Transfer Pricing’ and invites responses from the full range of interested parties.
Tove Maria Ryding of EURODAD describes how intense lobbying from business – with energetic assistance from the UK government – led the European institutions to delay discussion of country-by-country reporting until 2018. Is this good enough? Time and the citizens of Europe will tell.
In the United States a form country-by-country reporting has made it onto the statute books. Section 1504 was introduced to combat corruption in the extractive sector. Corinna Gilfillan of Global Witness tells the story so far and highlights what is at stake. Adequate accounting in the mining sector could be the prequel to much greater transparency across the private sector.
And Will Morris of the CBI gives two cheers for country-by-country reporting. While he welcomes the idea of greater transparency, he worries that Murphy’s proposals won’t do the work that their author thinks they will.
Richard Murphy himself introduces the articles in the Focus, describes something of the history of country-by-country reporting and sets out its key features. The phrase has gained ground in the last ten years. But its author is still working to secure the substance of his original proposals. He does so in the teeth of opposition from some of the most powerful lobbies on earth.
Download the edition here, and please feel free circulate to colleagues and friends.
This edition of Tax Justice Focus is guest edited by Richard Murphy, the originator of the idea of country-by-country reporting. A little more than a decade after he first began to develop the concept, Murphy has brought together authors from the Organisation for Economic Co-operation and Development (OECD), from the Confederation of British Industry (CBI), from Global Witness and from the European Network on Debt and Development. Together they present a unique picture of the current state of the campaign for country-by-country reporting throughout the world. Continue reading “Tax Justice Focus 2014 – the COUNTRY-BY-COUNTRY REPORTING edition”
William Campbell-Taylor, an Anglican priest who featured heavily in the final chapter of Treasure Islands (except in the US edition,) has become the first political party candidate ever to win a seat on the common council of the City of London. That’s a record that stretches back a thousand years, to the emergence of the City of London Corporation (or at least till the start of its ‘modern’ electoral machinery, which emerged in the 13th Century.) Continue reading “Party politics pierces City of London for first time in centuries”
From the excellent Financial Secrecy Media Monitor:
“Earlier this year the offshore financial sector in Bermuda launched a campaign called “Everybody’s Business” which aims to “educate Bermudians about the importance of international business to all sectors of the community”, and is sponsored by PriceWaterHouseCoopers and the Bermuda Business Development Agency. (“International business” is a euphemism for offshore finance.)” Continue reading “Bermuda’s offshore sector tells local dissenters to f*** off”
From the Equity and Justice Working Group Bangladesh:
“No exclusive research or study (has been) conducted so far in Bangladesh to identify what amount of money has been evaded the MNCs out of the payable taxes.” Continue reading “Revenue mobilisation and tax evasion in Bangladesh”