The Task Force for Financial Integrity and Economic Development (on whose committee I sit) has got a new web site.
It also has a new blog.
I’m pleased to be contributing to both.
The Task Force gets a web site
Corruption, Economics, Tax Havens, Tax justice
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May 212009
Reflections on recession
Economics
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May 212009
Can you see the brick wall? | AccMan .
Dennis Howlett reports from ground level.
I share his impressions. Claims of green shoots suggest the real disconnect between the financial services sector and the rest of the economy.
And the fact that the cash put into quantitative easing (queasing as my friend Colin Hines calls it) is being used to finance speculation but nothing real, hence the increase in bank share prices.
Add to that the fact that banks are now recording profits by simply releasing previosuly made mark to market provisions and the recipe of false information as precursor to more problems is starting all over again.
This is tax award season; the time of year when the tax journals give awards to their advertisers and subscribers for things like being transfer pricing firm of the year. I kid you not.
Christian Aid has got in on the act. It has created the Alternative Tax Awards:
Christian Aid today announces the winners of its new Alternative Tax Awards. Categories include Tax Haven Enthusiast of the Year, Low Tax Rate Achievement and Most Surprising Use of Tax Havens.
The Alternative Tax Awards take place today at a ceremony in central London, coinciding with accountants’ own Taxation Awards at the Hilton Hotel on Park Lane.
Christian Aid has created the Alternative Tax Awards to draw attention to the devastating effect corporate tax dodging has on poor countries. ‚ÄòWe calculate that multinational corporations and other companies trading internationally dodge at least $160 billion in taxes in the developing world every year,’ says Christian Aid’s tax campaign manager, Judith Cavanagh.
‘This is one-and-a-half times the total annual amount of aid that poor countries receive and is desperately needed to fund public services such as hospitals and schools. We estimate that if the money was used according to current spending patterns, then the lives of some 350,000 children under five would be saved each year.
‚ÄòMuch of the money that goes missing ends up in tax havens. The accounting rules must be reformed to prevent this happening. Tax dodging costs lives.’
Christian Aid will hold its Alternative Tax Awards ceremony outside the Hilton Hotel on Park Lane at 7.45pm this evening. The winners – detailed below – are invited to collect their trophies from us.
For the full award citations, please visit: www.christianaid.org.uk/images/alternativetaxawards.pdf
Greatest Potential for Tax Reform:
The joint winners are the Big Four accountancy firms – PriceWaterhouse Coopers, KPMG, Ernst & Young and Deloitte & Touche – together with the International Accounting Standards Board. These five organisations have between them the power to change the rules to help developing countries obtain the money that is rightfully theirs.
Most Surprising Use of Tax Havens:
The joint winners of this award are CDC Group plc and its sole owner, the UK Government’s Department for International Development (DFID). CDC has 72 subsidiaries, of which 40 are in tax havens including Bermuda, Mauritius and the Netherlands Antilles, the company told MPs in December 2008.
DFID argues that if CDC did not use tax havens, then investors in the funds used by CDC would be taxed twice. Christian Aid nonetheless finds it astonishing that the government department set up to tackle international poverty allows its own company to exploit tax havens as a means of avoiding tax in developing countries.
Low Tax Rate Achievement Award
P&O cruises’ owner Carnival deserves a special mention for its outstanding, dedicated and entirely legal use of tax avoidance. Between 2002 and 2008 inclusive, Carnival plc paid tax of just $61.7 million on total profits of $4.3bn. This is an effective tax paid tax rate, over the seven years, of approximately 1.4 per cent.
Tax Haven Enthusiast of the Year:
The winner of this award is Barclays plc. The financial services company is extremely keen on tax havens – with subsidiaries in some 315 of them. Again, this is entirely legal.
Most Overhyped Reform of the International Tax System:
Bilateral Tax Information Exchange Treaties (TIEAs) are the clear winner of this award. The Organisation for Economic Co-Operation and Development says TIEAs are an important weapon against tax dodging. They are voluntary instruments, however, which offer little or nothing to developing countries.
Good work Christian Aid. It was time someone pointed out that the awards the industry gives are for three things. The first is for redistributing wealth from the poor to the rich. The second is for undermining the rule of law. The third for destroying democracy, for tax is the essential element that ensures it might work by providing governments with the means to fulfil their mandate and tax advisers seek to reduce its availability. The rest is window dressing.
I have read some of the Arculus Report issued by the Tories, particularly with regard to tax.
It is a repeat of their oft repeated mantra: don;t tax mobile capital or it will go away. Let’s re-write that another way: don’t tax the investment income of the rich, put all tax burdens on working people. Much of it comes straight out of the flat-taxers manual. George Osborne has clearly not got over that stage of his development as yet. And they’re still setting up Ireland as a paragon of virtue. The logic that if everyone steals there is nothing left to steal appears to have passed them by.
But there are also some classic comments in there which shows how little those who wrote it knew about tax. I like this one best:
Tax issues can be opened retrospectively.
Seriously: they think that is a problem. So only clairvoyants need apply for jobs with HM Revenue & Customs in future. You have been warned.
May 202009
Tax Justice Network: Challenging times for Christians in Jersey.
More on the excuses offered by some in Jersey.
And a challenge that they justify their position – which none have so far done.
There is a new demand for transparency from those who represent us in Parliament. MPs expenses, their tax treatment, and their outside sources of income are all coming under closer scrutiny. Better regulation and disclosure has been suggested and yet that there seems one obvious and simple solution to this problem.
Once the new allowances for MPs’ and peers’ expenses have been agreed they should, like the expenses of all other employees in this country, be reported to HM Revenue & Customs and be included as income on the MP’s tax return. The MP in question would then have the duty to submit a claim to prove that the expenses were allowable in the course of their employment. Anyone that were not would be taxable, and parliament should be held to account for why they were paid. The MP would, of course, pay the tax.
There would be an exceptionally easy way to check that this was taking place: in exchange for the additional allowances that MPs and members of the House of Lords might enjoy because of the peculiar nature of their employment they would be required to place their tax returns on public record each year. This is, of course, required of politicians in the USA despite it being the bastion of privacy.
Anyone standing to be an MP would have to do the same: their tax return would have to be filed for public inspection at the time that they registered as a candidate in an election. Persons proposed for nomination to the House of Lords would be subject to the same scrutiny. Their tax returns would be placed on public record when their nomination was approved.
A one clauses act of Parliament could achieve this fundamental change in transparency and disclosure that will, at the same time, make public all the other sources of income of MPs, present and prospective, and of members of the House of Lords.
Adding a second clause could resolve another long running problem. There has been ongoing uncertainty about the tax residence and domicile of some MPs and peers. This would be resolved if all of their tax returns were available for inspection. Any person not resident and domiciled in the UK would then be disqualified from holding membership of either House of Parliament.
If parliament is serious about showing that its members comply with tax law the solution is readily available: make it possible for all to see that this is really the case.
British Virgin Islands signs tax treaties – Forbes.com.
The British Virgin Islands is closer to getting off an international “gray list” of global tax havens.
The Caribbean territory said Monday it has signed tax information exchange agreements with the Nordic group of countries at Iceland’s Embassy in Denmark.
Another deal with Greenland and the Faroe Islands goes to prove how absurd the OECD was in saying 12 Tax Information Exchange Agreements meant a place was internationally compliant.
There are mkore than 20 states in the G20.
There are 27 in the EU.
200 odd in the world.
Why 12?
It is completely illogical.
One example: as yet Italy and Spain have not a single Tax Information Exchange Agreement between them.
Financial regulation plan faces UK obstacles
Regulation
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May 202009
FT.com / Europe – Financial regulation plan faces UK obstacles.
The UK and Europe in conflict again.
Sometime we’re going to have to accept that London is not the centre of the world.
It doesn’t look like it’s happening just yet.
Investors rebel over Shell executive pay
Uncategorized
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May 202009
FT.com / Companies / Energy – Investors rebel over Shell executive pay .
A global investor backlash over executive pay escalated on Tuesday when shareholders turned on Royal Dutch Shell and voted against its executive pay plan.
In one of the biggest investor rebellions over directors’ pay, about 59 per cent of the oil multi national’s shareholders voted down the company’s remuneration report.
Amazing.
Things can chnage.
There is hope.
