From Tax Justice Network for Africa and Christian Aid, a new report entitled Africa rising? Inequalities and the essential role of fair taxation.
It investigates income inequality in Ghana, Kenya, Malawi, Nigeria, Sierra Leone, South Africa, Zambia and Zimbabwe: there has been little definitive analysis of income inequality trends on the continent. Continue reading “New report: Inequality, Tax and a Rising Africa?”
As we and everyone else have remarked, it’s the book of the moment: Thomas Piketty’s Capital in the 21st Century. We are reading it, and like so many others, we are impressed.
Our main contribution to the debate will be – when we finish our analysis – to argue that the inequality problem is significantly understated. Crucially, it doesn’t take good enough account of the $21-32 trillion stock of offshore wealth – which we already explored, here and here. Piketty does reference our work on p19, but he prefers to endorse much smaller offshore estimates produced by Gabriel Zucman, who worked with Piketty and uses very different methodologies from ours.
We are confident that our bigger estimates are more robust, and we will bring you more on this subject soon.
In addition, read Michael Hudson’s new polemical analysis on Naked Capitalism, which makes some very useful points about taxation, among other things, in explaining why Piketty’s numbers are too small. As he puts it:
“The problem with Piketty’s statistics are that it vastly understates how unequal the world really is.”
Unfortunately, no time to write more on this now; but we will be back with more soon.
[vc_row][vc_column][vc_column_text]From Reuters:
“Most chief executives globally would support the publication of country-by-country financial information to help stamp out corporate tax avoidance, a survey showed on Wednesday. Continue reading “PWC survey: most CEOs back country by country reporting”
Private Eye reports on UK shell companies
From Prof. Prem Sikka:
“Some 4,000 individuals appearing on international lists of alleged fraudsters, money launderers, terror financiers and corrupt officials were directors of UK registered companies in 2008 (the most recent data).” Continue reading “On Britain’s new honesty box for corporate fraudsters.”
In the April 2014 Taxcast: Forget Congress! The Taxcast looks at the latest US state to take matters into its own hands and legislate against tax havens. Also: the scandal of how the Bank for International Settlements has kept offshore private wealth data to itself, the British government tries to impress its friends in Washington with a ‘tough’ new tax evasion offence, taxing problems in Nigeria and…how will UK Parliamentarian Lord Blencathra manage now that his £12,000 (c.$20,000) a month contract with the Cayman Islands has been terminated?
The download link is available here.
Produced by @Naomi_Fowler for the Tax Justice Network. Featuring: Tax Justice Network Director John Christensen, Maine Rep. Adam Goode, Phineas Baxandall of US PIRG, Mike Kadas of the Montana Revenue Department, Director of Ethical Consumer and the Fair Tax Mark Leonie Nimmo and Maine residents.
In an interview with The American Interest, looking at Ukraine and the looting of the former Soviet Union, the co-founder of Hermitage Capital speaks out – all guns blazing.
There are any number of Quotes of the Day we could highlight – but we thought we’d choose this one, prompted by the question of whether the West has any responsibility regarding the protection of looted wealth.
William Browder: Certain people in the West are completely enabling the kleptocracy in Ukraine and various other countries. Continue reading “Quote of the day: William Browder, Russia and Ukraine”
From the Buenos Aires Herald:
The total value of Argentines’ offshore assets as a result of capital flight reached US$298.891 billion in 2012, rising more than 250 percent from 1991, the latest report by the Economics and Finance Centre for Argentine Development (CEFID-AR) revealed. Continue reading “Report: $300 billion in Argentina’s offshore assets”
Get the book (in Dutch)
From our colleagues at SOMO in the Netherlands, an excellent article translated from the original in the Volkskrant newspaper. While it focuses on the Netherlands, it is another sign of the growing global awareness of the links between human rights and tax haven and secrecy jurisdiction abuses. Read more about tax havens and human rights here. Continue reading “Mailbox companies and human rights: the Dutch connection”
Tomorrow (Thursday) Barclays Bank holds its Annual General Meeting in London. This will mark the culmination of ActionAid’s ‘Clean Up Barclays’ campaign, which focuses on the bank’s promotion of the use of tax havens – notably Mauritius – for multinational companies looking to invest in Africa. Continue reading “Barclay promoting tax havens: protest at its AGM”
Prem Sikka
Our friend Professor Prem Sikka from Essex University, who regularly hosts our annual research conferences, and helped organised TJN’s launch in March 2003, and is a Senior Adviser to TJN, has received a Lifetime Achievement award from the British Accounting and Finance Association. The award is in recognition of Prem’s distinguished service to the accounting academy, and takes account of his awesome contribution to research and teaching.
Readers of this blog will know how much Prem has contributed to our critique of governments that impose austerity programmes on poor and vulnerable people while providing tax breaks to rich and powerful people and turning a blind eye to tax evasion and avoidance. In 1998 Prem and TJN’s director John Christensen launched the Offshore Watch website to provide a focus for scholarly research and discussion about the role of offshore finance in the era of late capitalism.
His monograph ‘No Accounting for Tax Havens’ – co-authored with Austin Mitchell, John Christensen, Philip Morris and Steven Filling, was published in 2002, shortly before the founder’s meeting of TJN in November that year – has provided a powerful critique of the unaccountability of tax haven governments, particularly the UK government and the States of Jersey.
Other monographs from the same series published by the Association for Accountancy and Business Affairs help illustrate Prem’s extraordinary contribution to our critical understanding of how accounting has contributed to shaping social and economic injustice.
Anyone who has had the pleasure of meeting Prem will know of his passionate sense that accounting is so much more than a technical process of adding and subtracting numbers on a profit and loss account. As Prem puts it:
“The recurring theme in my research and teaching is that accounting is a moral and political practice rather than some dry technical phenomena. It matters because it has serious consequences, as recent debates about tax avoidance and banking crash have once again vividly demonstrated. I have always believed that academics should stimulate public debates and have been very fortunate to have been able to communicate with mass audiences through the popular media”.
Prem is a prolific writer, regularly posting articles in The Guardian, The Conservation, and across the accounting press. He is a Board member of Tax Justice Research, which acts as a governance body to which TJN is accountable.
Well done Prem. We look forward to many more years of your passionate support and guidance.
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”