2010 January » Tax Research UK

Shareholders want tax transparency

Banking, Country-by-country 3 Responses »

Jan 202010

Banks pushed to reveal cost of bonus tax | Mail Online.

Banks could be on a collision course with shareholders over how they report the effect of the Government’s bonus tax in their annual results next month.

The banks, which all pay their bonuses over the coming month, will also pay a tax equivalent to 50 per cent, and leading investors have said they expect them to spell out how much that figure will be.

But bank sources questioned by Financial Mail said they saw no reason why the details of the tax bill should be declared. One said: ‘We have never spelt out how much we pay in National Insurance for our staff and I can’t see why this would be any different.’

It’s a lack of transparency that lets bankers shift the burden of their abuse on to shareholders and then on to pension funds and then on to you and me.

We must have massively increased transparency now.

Country-by-country reporting is part of this.

Obama deserves rebuke from Massachusetts

Labour 1 Response »

Jan 202010

Alexander Cockburn: Obama deserves rebuke from Massachusetts | News & Politics | News & Comment | The First Post.

Obama richly deserves the rebuke from Massachusetts. Armed with a nation’s fervent hopes a year ago, he spurned the unrivalled opportunity offered by economic crisis to do what he pledged: usher in substantive change. He’s done exactly the opposite. Wall Street has been given the green light to continue with business as usual. The stimulus package was far too weak. The opportunity for financial reform has passed. Trillions will be wasted in Afghanistan.

When will so called radical politicians get it? People want them to be radical.

In which context it’s good to see my Green New Deal colleague Ann Pettifor is seeking a safe Labour seat. I can’t see Ann losing her radical edge if elected.

The last thing Africa needs is a tax haven

Barclays, Development, PWC, Tax Havens 1 Response »

Jan 202010

Tax haven risks corruption, OECD warns Ghana | Business | guardian.co.uk .

As the Guardian notes:

Ghana has had a stern warning from the Organisation for Economic Co-operation and Development to ensure that its emergence as a tax haven does not fuel corruption and crime in west Africa.

Ghana is becoming an offshore financial centre but Jeffrey Owens, head of the OECD’s Tax Centre, said: “The last thing Africa needs is a tax haven in the centre of the African continent.”

The OECD is in talks with Ghana to guarantee the country “adheres to the highest standards and integrity”. Owens said Ghanaian officials “are aware of the risks they are running”.

They might be. But let’s be clear, they’re not the real moves and shakers behind this. As the Guardian also notes:

Barclays Bank has been advising Ghana’s government on establishing its financial centre.

Wilson Prichard, a researcher at the Institute of Development Studies at Sussex University said:

Aside from the general social costs associated with the operation of tax havens globally, in the absence of a very strong regulatory framework and very strong standards of transparency there’s a particularly high risk that a tax haven in west Africa, which is home to major oil wealth and high levels of corruption, could facilitate large-scale corruption and tax evasion, and pose a correspondingly large risk to good governance and economic growth in the region.

But Barclays are backing it anyway.

And you want a better example than that of the complete and utter social irresponsibility of banks in the face of the risk of corruption, fraud and social breakdown?

It would be hard to find unless it is PricewaterhouseCoopers’ support for the development of a tax haven in Jamaica.

This is the financial services industry pursuing profit at cost to society at large. There’s nothing new about that. But the time has come to stop it.

Tax-Haven Crackdown ‚ÄòBig Success’ says OECD

TIEA, TIEAs Comments Off

Jan 202010

Tax-Haven Crackdown ‚ÄòBig Success’ as OECD Begins Review Process – Bloomberg.com.

As Bloomberg notes:

Cracking down on tax havens has been “one of the big success stories” of the Group of 20’s efforts in the financial crisis, the OECD said, as the Group shifts from naming-and-shaming to ensuring compliance with tax standards.

The Paris-based Organization for Economic Cooperation and Development said 195 tax-information exchange agreements were signed last year as countries faced fresh scrutiny from the G- 20, up from 23 in 2008. Nineteen countries that had been branded as not sufficiently meeting international standards were removed from that category on the OECD’s so-called gray list.

Well, if big is relative and better then the nothing the OECD achieved from 2002 to 2008 then this is correct.

But it’s a very, very long way from a major success.

As I’ve noted time and again the Tax Information Exchange Agreements the OECD promotes can only be useful if there is also automatic information exchange to provide the ‘smoking gun’ proof that a person is undoubtedly the beneficial ownership of a financial structure in another jurisdiction. Without that the number of requests under TIEAs will be miniscule – hundreds maybe a year – and that has not deterrent effect.

Second, saying that signing 12 such agreements is enough to establish international acceptability is ludicrous. There are more than 12 countries in the G20 for a start, 27 are in the EU, there are over 230 tax jurisdictions in the world (some say slightly more). Why 12?

The goal has to be comprehensive coverage of Tax Information Exchange Agreements which can only eventually be achieved on a multilateral basis and full automatic information exchange on the beneficial ownership (for now) of all offshore structures (where offshore simply means ownership is one jurisdiction but the transaction is recorded in another) with in the long term income and other data all exchanged as well.

Then we beat tax fraud for good.

And other fraud.

And money laundering.

And a great deal of crime.

And corporate corruption.

And bribery.

And why would anyone be opposed to that?

The OECD needs to be brave: it’s horizons are too limited. Now is the time for it to break out and go for real reform.

Ted Kennedy’s seat lost to Wall St.?

Banking, USA 1 Response »

Jan 202010

Debtonation ¬ª Blog Archive ¬ª Ted Kennedy’s seat lost to Wall St.?.

From Ann Pettifor’s blog:

I am hearing from informed sources in the US that the Democrat candidate in Ted Kennedy’s seat is already blaming President Obama. for the loss of the ultra-safe Democratic seats.

“We were hurt by White House Failure to confront Wall St.” says the candidate’s pollster.

Celinda Lake pointed to polling released by the Economic Policy Institute showing that 65 percent of Americans though the stimulus served banks interests, 56 percent thought it served corporations and only ten percent that it benefited them.

Is there still time for Labour to learn from the spectacular misjudgement of a President considered the most sophisticated of politicians?

You just have to hope so.

Labour’s conundrum

Green New Deal 3 Responses »

Jan 192010

The antidote to Gordon Brown’s caution | David Wearing | Comment is free | guardian.co.uk .

David Wearing, writing about last weekend’s Fabian conference has said:

The conference finished with a “Dragons’ Den” for a major idea that could beat the right at the next election. The pitch receiving the most enthusiastic response from delegates was to adopt a radical “Green New Deal” for reordering the economy to deal with the challenge of climate change. This was clearly a reference to the plan of the same name drawn up by the New Economics Foundation, involving major structural changes to the financial system and serious investment in green industries to create new jobs.

Revealingly, the pitch was opposed by one “dragon”, Brown’s pollster Deborah Mattinson, who said that, while climate change was clearly “the biggest issue facing humanity”, a “Green New Deal” was not an idea she could sell to voters.

This encapsulated the impression that I took away from the conference: a grassroots bursting with enthusiasm and ideas about how to respond to the new economic realities, versus a frustratingly conservative and cautious leadership. It’s a picture that is unlikely to change before the general election, but the subsequent battle for Labour’s future could make for an interesting contest.

I agree

We know what people want

The Labour leadership just needs to deliver

Amazing that they won’t

Billy Bragg’s not paying his tax

Banking, Ethics 8 Responses »

Jan 192010

The BBC and many others report:

The singer and activist Billy Bragg has threatened not to pay his taxes in protest against the bonuses being paid out by Royal Bank of Scotland (RBS).

He is calling on the government to intervene and limit the proposed £1.5bn that the bank, which is 84%-owned by the taxpayer, wants to pay in bonuses.

Mr Bragg said he felt frustrated and powerless to stop the bonus culture.

"We have a short window of opportunity between now and 31 January, but the two main political parties don’t seem to be interested," Mr Bragg told the BBC.

"This is a frustration borne out of a sense of powerlessness in the face of the bonus culture. I don’t know what else to do," he said.

I understand that frustration. And what Billy Bragg is doing is great gesture politics. But as I’ll say on air on London’s LBC radio in a few minutes, it’s not ultimately good politics.

I do think the ballot box is the way to present this message.

I do think lobbying parliament and meeting MPs is the way to go forward.

I do not approve of ‚Äòtax strikes’ – the result could harm the poorest in our society. And it could harm the well being of public servants.

So now the gesture has been made I suggest tax is paid. And then use every democratic means possible to pursue the issue. Which should indeed mean limited bonuses, full nationalisation of RBS so it can be used as the proper basis for full banking reform and an end to the abuse that modern banking represents.

Have we learned nothing?

Economics 1 Response »

Jan 192010

FT Alphaville ¬ª Mervyn readies his pen.

The consumer price index approaches 3% so quantiative easing must end, intrest rates must rise and we must enter a depression.

All that when the risk is that on fundamentals deflation remains highly likely because soemtime soon China is going to have to flood the market with unwanted goods.

Have we really learned nothing? Do we really think that inflation is still the only important economic indicator?

I despair.

Precious little prudence in Forbes

Accounting, Auditing, Big 4 1 Response »

Jan 192010

My latest Forbes column is out. Entitled ‚ÄòPrecious Little Prudence’ it asks ‚ÄòWhen is a debt a bad thing–do accountants really even know?’

As I conclude:

[L]et’s never forget that both the IASB and IAASB are dominated and even significantly financed by the Big 4 firms of accountants and auditors – PricewaterhouseCoopers, Deloitte, KPMG and Ernst & Young.

According to popular myth these firms have had a ‚Äògood recession’ – little blame attaching to them for what has happened. But that’s just a myth, because the truth is they carry a great deal of responsibility for what has gone wrong – and should bear the consequences.

Which is something I firmly believe.