Search Result for Bono — 65 articles

The case against subsidising the Isle of Man to be a tax haven goes to the House of Commons

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Dame Margaret Hodge called an adjournment debate on tax abuse and the Isle of Man in the House of Commons yesterday. Her closing comments were of particular interest to me, referring as they do to suggestions first made on this blog on Monday:

Back to the Isle of Man, one might ask how this small country can afford to raise enough in taxes to run its public services without any contribution from corporation tax. The answer is simple: we subsidise it. It is our tax money that substitutes for the tax income that it could receive from charging businesses properly. It is our money that enables it to be a tax haven. Our Government do not just tolerate tax havens. They are using our taxes to enable the Isle of Man to operate as a tax haven. As with all these things, the Government refuse to be transparent, so let me try to unravel this.

Because we and the Isle of Man share a border, we also share what is called a common purse for VAT and other import duties. All VAT and import duties collected by the Isle of Man are passed to Her Majesty’s Revenue and Customs, and then the Exchequer gives the Isle of Man a sum on the basis of a formula that is supposed to reflect how much VAT has been generated from the economic activity that takes place there. In 2016, the then Chief Secretary to the Treasury renegotiated the formula and agreed a generous annual uplift of way above the level of inflation.

We give the Isle of Man more than £300 million a year, which is just under one third of its entire budget for public expenditure. That figure is set to rise to £340 million by 2019. This sum appears to have nothing to do with what is happening in the Isle of Man’s real economy, where employment is down and the population is declining. It has everything to do with what seems to be a deliberate policy intention of our Government to subsidise the Isle of Man and thus promote and support it as a tax haven. The Treasury has refused to publish the details of the formula on which our payment is based. I ask the Minister to release those details so that we can see how the sum is determined.

What this shows is that we are not innocent bystanders who simply put up with the utterly unacceptable activities in tax havens that have been exposed in the Paradise papers. We actively support and enable tax havens to function and exist. Without our subsidy, the Isle of Man could not afford to have a zero rate of corporation tax and could not function as a tax haven. The Isle of Man is well and truly a UK tax haven. Far from being at the head of the fight against tax avoidance and evasion, and money laundering, we are at the heart of the evil conspiracy involving advisers, the super-rich, global corporations and Governments. We are aiding and abetting the very few wealthiest and most powerful in our society to keep their wealth secret and avoid paying their fair share of tax.

The Minister will try to claim that his Government have achieved a lot to tackle avoidance and evasion. He might try to say how much better his Government have been than the previous Labour Government. I have never defended the record of the Labour Government in this area, but his Government’s record is also shameful. It is not what is done that really matters, but what is left undone.

I urge the Minister to tear down the shroud of secrecy and force all our tax havens to have public registers of beneficial ownership. This simple ask for better transparency about who owns what and where is utterly central to our desire to expose avoidance and hence stamp on it. I ask him to toughen up our regulatory bodies and to hound the Bonos, the Mrs Brown’s Boys and the Lewis Hamiltons of this world through the courts to make sure that they pay their proper dues. I ask the Minister to introduce legislation that will ensure that the advisers who dream up these tax avoidance wheezes are held to account for what they do, and held responsible and punished when schemes that they invent are found to be unlawful. Those three actions would go a long way to ensuring we have a responsible tax system that is fair to us all. I look forward to his response.

As has often been the case, I am on the side of Margaret Hodge on this one.

And I am grateful to her for giving such an airing to my arguments.

What’s Tony Blair up to?

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Over they years I have acquired a reputation for looking at Tony Blair's affairs, so this is interesting, posted on his website today:

Tony Blair has formally announced to staff his decision to close Tony Blair Associates and wind up the Firerush and Windrush structures. He will gift the substantial financial reserves to the Not For Profit work, on which he will continue to spend the vast majority of his time. The text of the email he sent is as follows:

Over the past nine years we have built a group of organisations employing around 200 people and working in more than 20 different countries round the world.

It is time to take this to a new level.

As I indicated last December at our annual all staff meeting, I want to expand our activities and bring everything under one roof.

I also want now to concentrate the vast bulk of my time on the Not For Profit work which we do. De facto, this has been the case in the past two years but we need to reflect this change in the way we are structured.

To this end, we are going to make the following changes:

1. We will close down Tony Blair Associates and wind up the Firerush and Windrush structures. I will retain a small number of personal consultancies for my income, but 80% of my time will be pro bono on the Not For Profit side.

2. The substantial reserves that TBA has accumulated will be gifted to the Not For Profit work.

3. We will bring our organisations under one roof and are in the process of obtaining new premises to do so.

There will be further announcements as we implement these changes.

Ends

Three thoughts. One, I hope the charities do some diligence on the source of the funds they are offered. Two, I hope the new structure is as transparent as the existing ones are opaque. Three, I hope Tony Blair has realised that opacity is very old hat and will go above and beyond what is required by law.

I can live in hope.

Memo to Bono: being anti-tax abuse is not the same as being anti-business

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I note Bono has stuck his our into tax debate again, saying, according to the Observer that Ireland’s tax policies have:

brought our country the only prosperity we’ve known.

and

We are a tiny little country, we don’t have scale, and our version of scale is to be innovative and to be clever, and tax competitiveness has brought our country the only prosperity we’ve known.

That’s how we got these companies here … We don’t have natural resources, we have to be able to attract people.

Let's start with facts for a moment and note that Ireland's low tax rates did not work from 1957 to 1994. When they apparently did work it was tax payer funds from the EU that actually made the difference. I've explained the history of this here so I won't do so again now, but the reality is that it was not low tax rates that created Irish prosperity, it was subsidies from taxpayers in other countries that did that.

But what really annoys me about the Bono interview is his implication that to be opposed to Ireland's tax position is to be opposed to development. He's quote as saying:

As a person who’s spent nearly 30 years fighting to get people out of poverty, it was somewhat humbling to realise that commerce played a bigger job than development. I’d say that’s my biggest transformation in 10 years: understanding the power of commerce to make or break lives, and that it cannot be given into as the dominating force in our lives.

All I can say is it took him a long time to realise, and when he did he got it fundamentally wrong, because if he really thought business was that transformational then he's utterly oppose tax competition and the sort of abuse that Ireland permits.

That's because for business to be effective everyone has to play on a level playing field, and Ireland crates a deliberately unlevel one, not least by letting some businesses apparently not even comply with the law.

In addition, every business has to have its cards face up on the table, and many businesses in Ireland do not publish accounts.

And no country can seek to undermine another (as Ireland does day in, day out) or the vulnerable suffer, as Ireland undoubtedly permits.

That's why Bono is actually supporting action that positively harms development and that directly reduces the well-being of millions if not billions in the world by standing up for an international tax architecture that encourages the flow of wealth from the poorest to the rich but never the other way. And in the process it destroys fair competition and honest business as well.

This is what we have been saying in the tax justice movement for years and that is why we are probably the most pro-business lobby there is right now, possibly in the world.

This is why we argue that business and those who invest in it should have all the information they need to make decisions. That’s called country-by-country reporting. Information and transparency are good for business. We’re doing more than anyone to support the supply of that information.

And we argue that small business should not be disadvantaged by big business. So we say big business should not be able to use tax havens, transfer mispricing, copyright, patent and royalty abuses to shift profits and more besides which reduce their taxes when small business can do no such things. That’s unfair competition by big business. You can even call it the abuse of monopoly power. We’re going out of our way to prevent it. Bono's supporting it.

And we’re arguing tax cheats should not have an advantage over honest business. So we’re arguing for more tax inspectors to catch the cheats and so create a level playing field for all honest business. No one else is doing that.

And we’re also demanding that all businesses must be required to comply with their requirements to file their accounts on public record, say who they are, tell us who runs them and be accountable for what they do. That massively reduces the risk of bad debts that are crippling for many businesses, especially in a downturn. No one else is more vociferous than us in demanding this – which would be of enormous benefit to business.

And we demand the same worldwide – including in tax havens, like Ireland – so exporting is easier and less risky. Lower risk reduces the cost of business and increases well being. No one else is doing that either.

We’re even demanding more efficient capital markets – by demanding that we understand better through country-by-country reporting just what risks there are inherent within multinational corporations, which is information simply unavailable at present. No one else is doing that.

I could go on, but with respect to Bono, his problem is not that people like the tax justice movement who oppose his views are anti-business, because we’re not. We’re anti-business abuse, and that's very different. Being in favour of a level playing field – which is what we want – is not anti-business. It’s decidedly pro-business. But it sure as heck scares those who make profit from abusing their positions of power in the market, which is real anti-business activity.

Bono needs to retract, now.

It’s time to get over the failed culture of aid: we have to give developing countries the taxes that are rightly their own

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I'm sure I'm not alone in having problems with President Zuma of South Africa. He's not an appealing man for many reasons, but I suspect he's right when he says this, as reported in the FT this morning:

Jacob Zuma, South Africa’s president, has warned western companies they must change their old “colonial” approach to Africa or risk losing out even more to the accelerating competition from China and other developing powers.

Western businesses and governments have a “psychological problem” and are still prone to lecturing Africa, Mr Zuma said in an interview with the Financial Times.

We saw a perfect example of this "problem" yesterday. Tony Blair reflected the ethos  in an Observer article, quoting as his allies Bon and Geldof. He promotes a failed culture of aid backed by western foreign direct investment that has denuded Africa through tax abuse via tax havens; issues Blair fails to mention and that, oddly, Bono doesn't like to adress.

No wonder Zuma thinks as he does.

There is much more on this here.

If only Bill, if only Bono….then we’d have real change and no need for “innovative financing for development”

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The Elysee Palace have issued a press release that says (near enough):

The President of the Republic received together this afternoon, at the Elysee Palace, Mr Bill Gates, co-chair of the foundation "Bill and Melinda Gates," and Bono, co-founder of the non-governmental organization "ONE". The Minister for Development, Mr. Pascal CANFIN participated in the interview.

This meeting enabled a detailed exchange on the challenges in the field of development and international solidarity, especially in Africa where the President of the Republic on Friday and Saturday will his first trip since his inauguration.

And then it says:

The interview revealed a convergence of views on strong measures to improve financial transparency and the fight against corruption. Engaged in negotiations in Brussels and Strasbourg, France actively supports the adoption of an ambitious European directive aimed at strengthening transparency obligations of accounts mining and forestry.

If only that transparency extended to IT companies in developing countries.

And to music sales around the world.

If only.... because then we'd have a great deal more tax paid by companies under the control or influence of Gates and Bono and as a result a great deal more money available for development and there'd be no need for this to fund development:

The meeting also focused on the need for innovative financing for development, in particular through the implementation of a tax on financial transactions. 

Walk the talk guys. That's all we ask.

Bono isn’t innocent of tax avoidance because what he does is legal

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There was an almost amusing artcile in the Irish Times this week on Bono, as seen through the eyes of the charity he founded - One.

As the article noted:

EXECUTIVE DIRECTOR Jamie Drummond of the anti-poverty campaign, One, has defended U2 singer Bono’s tax arrangements, saying they are “perfectly legal”.

U2 faced severe criticism and charges of hypocrisy in 2006 when they moved part of their business arrangements to the Netherlands to avoid paying tax on royalties in Ireland following the cap which was put on the artists’ exemption scheme in Ireland in late 2005.

The criticism has been particularly focused on Bono, who has been a vocal advocate for developed countries to increase their official development assistance to poorer countries.

In addition, Bob Geldof, another advocate for the One campaign, has been criticised for availing of non-domiciled tax status in the UK to avoid paying large sums on overseas earnings.

Mr Drummond said both men were “not engaged in tax avoidance as I understand it. They are engaged in perfectly legal matters.”

Jamie is very confused.  Tax avoidance is by definition not illegal, even if its legality is sometimes hard to prove. And no one has ever suggested they've ever done anything illegal - which would be evasion, with which Jamie is (I hope) getting confused.

What we've questioned is their moral judgement in engaging in practices that use mechanisms such as tax havens that have been exploited to strip more than £100 billion a year from developing countries.

The charge is hypocrisy: failing to walk the talk even when the error was pointed out. Jimmy Carr had the courage to say sorry. Now it's time for Bono and Geldof to do the same.

What’s the difference between Bono and Jimmy Carr?

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Bono and Jimmy Carr have both in their time been revealed as tax avoiders. But there's a big difference.

Jimmy Carr has said he was badly advised, has admitted he's made a big mistake and has said he'll change. We've all made mistakes. He's admitted his. It's time to accept the apology and move on.

Bono hasn't admitted any mistake. He's argued it's his right to be "tax efficient", using tax haven practices of the sort also used to fleece billions from developing countries each year to enhance his already immense personal wealth. He's even gone so far as to argue that tax avoidance is one of the great Irish exports.

No wonder UK Uncut targeted Bono. They were right to do so. He deserves no respect at all. And he does continue to deserve to be named for being the hypocrite he is.

UNICEF are in the aid business – that’s why they’re so keen on big donor tax releif

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I have read the reports today on donor and charity back lashes on the cap on giving to charities to be applied to the most wealthy giving more than £200,000 a year.

I am not surprised to hear that UNICEF is amongst the charities complaining. I am sure there will be some other aid agencies in the same camp. And there's good reason for that.

You see, they're in the aid business. It's been going on for over sixty years now. There are a fair number of people who have made whole careers out of it. And one thing they're definitely not inclined to do is ask why they're still in business. There are two reasons. First it would put them out of a job if they succeeded in relieving poverty. There's self interest at work here. Second, ending poverty would require change in the world order that would definitely upset their donors. And that would never do.

There is a way to solve poverty. It is to redistribute wealth to democratically elected governments in poor countries that could be held accoutable for its use because tax could not be siphoned off by corrupt officials and major corporations into tax havens run by lawyers, accountants and bankers.

Some of the world's aid agencies have been able to embrace this idea of tax justice - and realise what they look at as a result is a post - aid world. Others remain wedded to the aid view of Geldof and Bono - where dependency prevails. Those who want to keep tax releif for rich donors have to be in that camp. It's a world view that does not ask why some are poor; it's a world view that doff's its hat to the wealthy donor without asking why they're rich and at whose expense. It's a perspective on aid that perpetuates non-emergency aid - and that, by implication, requires the perpetuation of poverty. And what is the benefit in that?

Insight: Microsoft use of low-tax havens drives down tax bill

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Great article from Reuters on this issue, here.

I admit I contributed.

As Lynnley Browning, who has just shifted to Reuters from the NYT noted:

Things were rosy in the giant software company's just-ended fiscal fourth quarter, which produced record sales of nearly $17.4 billion, a 30 percent increase in after-tax profit, and a 35 percent gain in earnings per share.

But for the Internal Revenue Service and foreign tax authorities, things weren't so rosy. Microsoft reported only $445 million in taxes in the U.S. and other foreign countries, just 7 percent of its $6.32 billion in pre-tax profit.

No wonder the US is in a mess.

No wonder the world is.

And until companies like Microsoft pay tax it will be.

So much for BillGates' philanthropy: it's easy to be generous when you don't pay much tax on your source of wealth.

As Browning noted:

Critics such as Richard Murphy of Tax Research LLP, an anti-poverty and tax research firm based in Britain, argue the U.S. system allows companies to park profits in places where the tax obligation largely disappears. He called Microsoft "a giant tax-planning exercise."

It sure looks that way to me.

Stand Gates along side Bono, I say.