The following report came to me via Eurodad, the European network of aid and development agencies. I have not taken part in this initiative, and recognise the legal problems it faces, but welcome it and support it:
Local politicians in Sweden, Norway, Finland, France, Spain and UK initiate a call for tax haven free cities and local governments: www.taxhavenfree.
It has become increasingly difficult to guarantee citizens good welfare when there is not enough tax money. Tax avoidance and tax evasion is a growing problem, particularly since multinational corporations have set the system to manipulate their accounting in order to transfer profits to tax havens.
According to James. S. Henry from the Tax Justice Network a total of 21-32 trillion dollars is hidden away in tax havens. If the fortunes hidden in tax havens were fairly taxed, there would be plenty of resources for investment in welfare services, in international solidarity and in a sustainable transition that could save our climate.
Tackling tax evasion is mainly a responsibility for politicians at national and international level, but in anticipation of an international framework local politicians can stop taxpayers' money from going to companies, banks or funds that use tax havens for tax evasion. For example, by taking back services into public hands or by imposing requirements for country-by-country reporting, which would show if bidders in public procurement paid a fair rate of tax in every country they operate in.
Since 2010 French regions have started to act in order to require more transparency in the accounts of the banks they are working with. In Sweden, Norway and Finland some municipalities are taking strong steps towards increased transparency and responsible tax practices in their public procurement. Now local politicians initiate an international network for tax haven free local governments:
”I find it deeply immoral that tax-funded activities are trying to conjure away profits in order to avoid paying tax”. Carina Nilsson, Councillor, Social democratic Party, Malmö, Sweden
”It must be our responsibility as politicians at all levels to ensure that every tax crown is used for our common welfare and not disappear off to tax havens.” Bertil Dahl, Councillor, Left Party, Kalmar, Sweden
“Everybody understands that we can not preserve the common welfare if our tax money goes to companies who do not pay taxes honestly. We simply have to win the fight against tax havens.” Thomas Wallgren, Member of the City Council, Socialdemocratic Party, Helsinki, Finland
”The local governments take most of the responsibility for the regime of welfare services and this through tax financing. Therefore, we also must be active in the fight against tax evasion”. Johannes Hirvaskoski, Member of the City Council, Center Party, Vanda, Finland
”This is about a distortive market structure few people know the extent of. Tax havens are devastating to the honest players. Poor countries are most severly affected, but also you and me”. Lars Giæver, Member of the City Council, Green Party, Lillehammer, Norway
“Tax havens allow organised tax fraud. They support a parasitic capitalism which steals from the community, the earth and future generations”. Øyvind Solum, Member of the City Council, Green Party, Nesodden, Norway
“Tax havens are legalized criminality. If we want to preserve the welfare of our societies and combat poverty, we have to get rid of tax havens”. Even Gran, Member of the City Council, Socialistic Left Party, Horten, Norway
”In the fight against tax havens, we local governments can be active players. We just have to choose as partners banks and other companies who do not evade taxes, by any means nor anywhere throughout the world.” Robert Lion, Member of the Regional Council, Ile de France (Paris region), Green Party, France
“I think it's financial suicide for the public sector to support companies that evade taxes. Local action will support and promote international legislation”. Ian Eiloart, Liberal Democrat, Member of Lewes District Council, UK
“Putting an end to offshore tax havens is both a political obligation and a matter of social urgency. The decline of public services and the withdrawal of assistance for the underprivileged are creating even wider gaps of exclusion and poverty”. Txentxo Jiménez Hervás, Member of the Regional Parliament in Navarra, Aralar Party, Spain
The Fair Tax Mark, which has been developed by a team of tax justice campaigners and tax experts, shows that a company is making a genuine effort to be open and transparent about its tax affairs and pays the right amount of corporation tax at the right time and in the right place.“It is necessary and urgent to end tax havens in order to achieve sustainability of public spending with a fair tax system based on the principles of equality”. Marisa de Simón Caballero, Txema Mauleón Esparza and José Miguel Nuin Moreno, Members of the Regional Parliament in Navarra, Izquierda-Ezkerra Coalition, Spain
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Some great quotes there! I particularly like:
“Tax havens allow organised tax fraud. They support a parasitic capitalism which steals from the community, the earth and future generations”
It’s all spot on, but the ‘stealing from future generations’ bit is often overlooked. Unemployment and the accompanying social malaise creates consequences that are permanent. We can’t borrow from the future to put people back into work now. That work time, and the economic and social benefits that could result, are lost forever.
“It has become increasingly difficult to guarantee citizens good welfare when there is not enough tax money.”
Respectfully disagree – the question isn’t quite how much taxation is raising, the real issue is what the taxes are being spent on. After all the average worker is taxed quite heavily when NICs + NI is taken into account….then there is CT, VAT etc.
Less tax wasted on certain areas of public spending means more for health & welfare.
Odd no be can ever find the waste
Allen
“Respectfully disagree — the question isn’t quite how much taxation is raising, the real issue is what the taxes are being spent on. After all the average worker is taxed quite heavily when NICs + NI is taken into account….then there is CT, VAT etc.”
You’re right the average worker is taxed quite heavily, but the point Richard is making is that the average Multi-National Company & the average, immensely wealthy inhabitant of the square mile isn’t taxed very heavily at all, if at all.
“Less tax wasted on certain areas of public spending means more for health & welfare.”
Hard to say what you mean at this point. What do you think is wasted?
Maybe we could start by excluding tax-haven-based companies from bidding, or being included in bids, for NHS contracts?
@ William1
You said: “You’re right the average worker is taxed quite heavily, but the point Richard is making is that the average Multi-National Company & the average, immensely wealthy inhabitant of the square mile isn’t taxed very heavily at all, if at all”
Please explain how those on PAYE are not taxed ‘at all’…??
You are well aware that they are taxed, but also that substantial shelters remain avail;able for those with wealth
So please don’t waste our time with ridiculous comments
The Inconvenient Truth (ha)
PAYE isn’t a tax, it is a means of collecting tax. Saying that because someone is under PAYE s/he must be paying the right amount of tax is absurd. S/he might owe far more than is collectible under PAYE. S/he might turn round & claim back the tax collected.
Don’t you ever file tax returns?
One thing I struggle with is getting my head around the maths — Especially on a lazy Sunday evening after a day in the pub.
What I mean is that you talk about the 1% as being the ‘wealthy’ and they don’t pay enough tax – And I agree they don’t (and under your rules I’m probably one of the top few % – I can never quite tell – But then so are you Richard looking at your accounts so I am in the same boat ïŠ). But even if that population pay more tax then I wonder how much extra tax that would bring on — e.g. if you added 5% to the top rate then how much would that really bring in (assuming full payment) bearing in mind it would only hit a small % of the population So I am thinking that their earnings (although large on an individual by individual basis) may not be that much as a % of the whole UK population’s earnings so an extra 5% on a relatively small amount may not be that lucrative for HMRC – if you see what I mean. Or have I got that wrong and are their earnings as a % of the total earnings in the UK actually quite a large %. The problem is I have no ‘real’ feel. I imagine there may be others who have the same perception. There are probably some numbers somewhere but I don’t know where to look- You may have explained this already but I don’t know where.
I think easier to understand is the tax gap. Clearly some of the top tier wealthy individuals and multinationals ‘play games’ and avoid tax (*). And clearly some people evade tax. So HMRC is being short changed. Doesn’t matter to me whether the number is what HMRC say or what you say (I suspect somewhere in between is the truth) , but a lot of money either way.
(*) I would note that it may not just be the top tier. I recall when I was working for a Top 4 firm back in 2000 (ish) I got a call from someone trying to sell a scheme to reduce my tax bill and I wasn’t earning mega bucks (a lot but not mega. So it is entirely feasible that it’s not just the uber rich that are in schemes to avoid tax.
HMRC publish plenty of stats to let you do the estimates