Monday, June 26, 2017

e - NEWSLETTER: June - July, 2017 @ Tax Justice Network


Dear subscriber,
Welcome to this latest edition of the Offshore Wrapper, featuring highlights from the world of tax justice, the latest from the TJN blog and a comprehensive list of links to news stories on tax and illicit finance. 
As always do send though any tips or suggestions to

Poland takes on the tax avoiders

Poland has just mounted an impressive demonstration of what can be done to turn around government budgets when governments take on tax avoiders. 
The eastern European country has slashed its forecast for its budget deficit by 90% and cancelled plans to issue new debt after government finances dramatically turned around. 
Ministry of Finance officials are putting that turnaround down to efforts to clamp down on tax avoidance and evasion by foreign companies operating in Poland. 
Last year researchers claimed that companies were using over 600 'legal structures' to shift profits out of Poland and discovered some foreign companies paying much less in taxes than domestic ones. 
Research carried out by Finance Uncovered and published earlier this year also found that Poland had one of the lowest corporation tax takes in the region, despite having a similar tax rate to neighbouring countries. 

BVIs are not a tax haven according to new PR report commissioned by the BVIs

The British Virgin Islands have embarked on a PR drive to tell the world that the country is not a tax haven. 
The country has commissioned a consultancy called Capital Economics to write a report detailing the economic contribution made by the $1.5 trillion in assets parked in the small island nation. 
Capital Economics, who have written similar reports in the past defending other small island nations (also definitely not tax havens) such as Jersey, talk about the hundreds of thousands of jobs around the world supported by capital parked in the Virgin Islands. 
The claims are of course nonsense. The assets in the BVIs are not factories or machines, things that really do contribute to employment, but financial assets.
That money doesn't come from the hard earned pensions of Virgin Islands workers but from everywhere else in the world. It collects there because in the BVI those assets will pay no taxes and investors will be able to hide who they are. We at the TJN put together a rough estimate that rather than support economic activity throughout the globe, the BVIs cost governments $37.5bn in taxes a year. 
Regardless, Capital Economics and their clients in the BVI government try their best to put their best case forward. Lorna Smith, interim executive director of BVI Finance, said:
“The BVI has never been a secrecy jurisdiction. We adhere to privacy for clients."
Clients who want to avoid taxes, no doubt. 

Fears of UN backsliding in the fight against corporate tax avoidance

The Tax Justice Network, ICRICT and the Global Alliance for Tax Justice have written to the new UN Secretary General António Guterres urging him to make sure that the commitment to tackle multinational tax abuse is not eliminated from the UN Sustainable Development Goals (SDGs).
The SDGs, which replaced the Millennium Development Goals, for the first time committed countries around the world to take action on illicit financial flows (IFFs). The definition of an illicit financial flow has always included tax avoidance by multinational corporations.
However, campaigners have become increasingly concerned about resistance to tackling the issue from some quarters of the UN system. In particular, there is concern that the UN Office on Drugs and Crime (UNODC), a body with neither expertise nor interest in tax issues, has had itself designated the lead organisation for the SDG target on IFFs.
Copies of the letters are available on the TJN website. 

Pakistan needs to improve tax collection to boost development

If the UN is planning on giving up on fighting tax avoidance someone better tell the UN Development Programme in Pakistan.
This week UN Assistant Secretary-General and Regional Director of UNDP for Asia and the Pacific Haoliang Xu criticised the country for its low tax take, and encouraged the country to improve tax collection in order to boost the resources available to fund education, healthcare and infrastructure.
In recent years the tax to GDP ratio has dropped from 14% to 10% in Pakistan, whilst in Bangladesh the government is targeting 18%.

The latest Taxcast

The June 2017 Taxcast is out now!
Has the UK just had its first tax justice general election? Are we seeing a popular shift towards tax justice in the UK and in the US? Is this the beginning of the end to our long austerity winter? How much do people REALLY care about taxes, who pays them and who doesn’t?

Featuring: Vanessa Williamson, Governance Studies Fellow at the Brookings Institution and author of Read My Lips: Why Americans Are Proud to Pay Taxes, John Christensen of the Tax Justice Network, Will Snell of Tax Justice UK and with brief appearances by President Donald Trump and Hillary Clinton. Produced and presented by the the Tax Justice Network's Naomi Fowler.

The latest from the TJN Blog

UN must defend target to curtail multinational companies’ tax abuse

The Tax Justice Network, The Independent Commission for the Reform of International Corporate Taxation, and the Global Alliance for Tax Justice call on the UN Secretary General to make sure the commitment to action on tax abuses by multinational companies remains part of the new UN Sustainable Development Goals. The Tax Justice Network, ICRICT and […] The post UN must defend target to curtail multinational companies’ tax abuse appeared first on Tax Justice Network.
Read more

The BVI: Responsible for worldwide tax losses of $37.5 billion a year

An extraordinary report by consultants Capital Economics, for BVI Finance, claims that the British Virgin Islands are responsible for $1.5 trillion of assets invested around the world, and that these result in 2.2 million jobs and $15 billion in tax revenue. A better approximation would be that the BVI imposes global tax losses of $37.5 […] The post The BVI: Responsible for worldwide tax losses of $37.5 billion a year appeared first on Tax Justice Network.
Read more

European Commission targets tax avoidance ‘enablers’

The European Commission has just published its proposals for rules for tax advisers and related intermediaries which will require advance disclosure to national tax authorities and cross-border automatic information exchange of any tax scheme that might be deemed potentially aggressive. This is a welcome step, albeit one that still leaves the public in the dark […] The post European Commission targets tax avoidance ‘enablers’ appeared first on Tax Justice Network.
Read more

Tax justice news from around the web

Image used under the creative commons license - image by Binuri Ranasinghe

Links Jun 22

Nigeria to Vietnam - global week of action snapshot, in #TaxJustice for #Public Services campaign Global Alliance for Tax Justice

Zimbabwe: Communities empowered to drive the tax justice campaign Mukasiri Sibanda’s Blog

Tax evasion and dirty money are draining Africa Mail & Guardian

Pakistan must boost tax revenue to finance development: UNDP Dawn

Operation Car Wash: An 11-Country Project on Cross-Border Corruption Global Investigative Journalism Network

Agents of Inequality: How Wealth Managers to the Super-Rich Undermine Society and What We Can Do About It The Nation

Australian Police Seize US$53 Million in Assets From Massive Tax Fraud OCCRP

Luxembourg: Bank Edmond de Rothschild fined almost €9 million for alleged involvement in Malaysian 1MDB scandal Luxemburger Wort

Island states targeted in great power competition Asia Times
'Small island nations lacking in exploitable natural resources and industrial capacity often develop into financial hubs, tax havens or other offshore capital services to supplement national income derived mainly from tourism to their palm-dotted beaches and lagoons.' Read about the Finance Curse here.

Proposed changes to the Canada Revenue Agency’s Voluntary Disclosures Program are welcome Canadians for Tax Fairness

Denmark Cracks Down on Money Laundering as Bankers Face Prison Bloomberg

UNU-WIDER Working Paper: Working Paper Tax revenue mobilization in conflict-affected developing countries ICTD

Poland scales back debt after tax crackdown Financial Times (paywall)

Marian Reviews Blank's 'The Timing Of Tax Transparency' TaxProf Blog

Switzerland: Companies ‘making progress’ on ethical standards swissinfo
'The government has defined corporate social responsibility as a contribution to sustainable development by companies. It covers a wide range of aspects, including working conditions, human rights, environment, anti-corruption measures, consumer interests and taxes.'

Links Jun 21

#TaxJustice for #Public Services campaign takes off Global Alliance for Tax Justice
See also: videos from PSI Tax and Workers and The Dodgy Tax-Haven Sandwich 

Tax bargains in unlikely places: The politics of Zambian mining taxes CMI

Over 15,000 Indian companies made profits in 2015-16 but paid no tax. Here’s why Hindustan Times

Can India gain from Swiss bank black money information? Very little The Economic Times

The super-rich are different: they pay less tax The Economist
'The Swiss leaks and Panama papers open a window on the tax-dodger’s world'

U.S. Hunts Swiss Bank «Leavers» finews Asia
'The U.S. is reviving its attack on tax evaders to find out where clients with Swiss bank accounts fled'

Investment and Trade in Services: The Outsized Role of Holdings and Intra-Firm Services UNCTAD

Five Steps to Fight Kleptocracy, and Raising the Corporate Veil - on 'the U.S.’s transformation into a global offshore haven' Kleptocracy Initiative

U.K. Probing Whether Ukraine's Ex-Tax Chief May Stand Trial In Britain Radio Free Europe - Radio Liberty

Honest Accounts 2017: How the world profits from Africa's wealth Jubilee Debt Campaign

How to stop dirty money coming into London properties Global Witness

Swiss banker admits paying millions in bribes to Fifa executive Julio Grondona The Guardian

Senior Barclays bankers charged with fraud over credit crunch fundraisingThe Guardian
'Bank, ex-chief executive and three others accused, marking first time any top bankers have faced charges over financial crisis'

Son of President of Equatorial Guinea on Trial in Paris for Embezzlement OCCRP

Leonardo DiCaprio Returns Birthday Gifts Amid Money Laundering Probe OCCRP
'The US Department of Justice suspects that the co-founder of the production company behind several blockbusters, including "The Wolf of Wall Street," may have helped the Malaysian prime minister steal US$ 4.5 billion from the southeast Asian country’s economic development and foreign investment fund between 2009 and 2015.'

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