Tax Research UK

The OECD is to set up a ‘task force’ to implement a coherent approach to tax and development issues, engaging developing countries and other key stakeholders including NGOs and business.

Membership is apparently to be of between 15 and 20 people.

The task force will convene in the next six weeks as an informal group representative of all stakeholders to develop clear and effective mechanisms for implementation and to avoid duplication. The informal task force will begin by mapping out existing international efforts relating to tax and development.

I welcome this. It’s a step in he right direction. But of course genuine openness in membership and a commitment to developing real change for the benefit of developing countries will be the true bench mark of progress. That’s one to be monitored.

Richard Murphy Development, OECD, Tax management

After more than 30 years the OECD held its first joint meeting of its development and tax committees yesterday. And as Jeffrey Owens, head of tax at the OECD has acknowledged this morning in discussions I’m attending, that was the result of civil society pressure.

Key things learned so far. They have said:

We have a common understanding of the central role taxation plays in development and poverty reduction:  a strong tax system is the heart of a country’s financial independence, its revenues are the lifeblood of the state.

This is a vital statement: this issue is much, much broader than a simple issue of corporate accountability, or information exchange, or simple technical assistance. This is about effective state building.

This is as important:

We also agree taxation is more than just about revenue mobilisation. The way in which revenues are collected and spent defines the symbiotic relationship between the state and its citizens, strengthening the former and making it more accountable to the latter.

A good start.

Richard Murphy Development, OECD, Tax management

Aid agencies worldwide are responding to the crisis in Haiti. It’s typical of Christian Aid that it is looking beyond the immediate crisis and addressing the underlying issues that have helped create the crisis that country faces.

As a result it is calling for full cancellation of Haiti’s debt of $890m, and for all emergency and development funds to be given not loaned.  Please sign Christian Aid’s petition now.

Haiti currently owes $890m, owed mostly to the International Monetary Fund (IMF) and the Inter-America Development Bank. Christina Aid argues that this is unacceptable. And while the World Bank’s announcement on Friday that it will waive repayments for five years marks welcome progress on this issue, what Haiti needs from the Bank and the IMF is concrete commitment that all its debts will be cancelled in full.

Richard Murphy Development

Global Financial Integrity (GFI) launched its "G20 Transparency" campaign today, an international grassroots sign-on drive to collect 100,000 signatures on a petition calling for greater transparency in the global financial system.  The petition will be delivered to Canadian Prime Minister Stephen Harper prior to the G20 meeting in Toronto at the end of June.

The campaign kicked off with the debut of www.G20transparency.com, a Web site devoted to the campaign where supporters may read and sign the petition, which will be available in Arabic, Chinese, French, Russian and Spanish.  The Web site will also allow supporters to share the petition with others via peer-to-peer and social networking tools.

The petition states:

Research shows that each year $1 trillion in illicit money flows out of developing countries - roughly ten times the amount of official aid money that is received.  The World Bank and others have cited these estimates repeatedly.  Illicit money flows are facilitated by an opaque financial system comprised of tax havens and secrecy jurisdictions.  Illicit capital outflows greatly exacerbate poverty and lead to the deaths of millions of people.  Illicit financial flows constitute a human rights problem of huge proportions.

The world’s largest economies - the G20 nations - will meet in Toronto on June 26-27, 2010.  They have an unprecedented opportunity to institute changes that will create a transparent global financial system that is open, accountable, fair and beneficial for all.

GFI director Raymond Baker said:

We intend to send a clear and resounding message that the world wants G20 leadership to recognize that human rights and international financial integrity are intimately linked. 

Where poverty is pervasive, civil, political, and economic rights often go unrealized. Today, large outflows of illicit money - many times larger than all development assistance - greatly aggravate poverty and oppression in many developing countries.

Please do sign the petition.

Richard Murphy Development, G20

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.

Richard Murphy Barclays, Development, PWC, Tax Havens

FT.com / UK / Politics & policy - Tories plan defence budget overhaul.

The Tories are announcing a defence policy today. As the FT notes:

One of the most controversial elements is likely to be the proposals to divert aid spending to support a new “stabilisation and reconstruction force”, which will be overseen by the national security council.

The new force will include soldiers, diplomats and aid workers in a joint working structure reminiscent of Britain’s former Colonial Office.

So now we know how the Tories will meet their obligation to aid: they’ll relabel defence as aid and ensure it’s aim is to promote British mercenaries.

It would be impossible to make up if they weren’t planning it.

It’s sick that this is their idea of development.

Richard Murphy Conservatives, Development

This short video from Oxfam USA asks a very simple question about what happens to the money we pay for the fuel we put in our cars. Watch it here:

Richard Murphy Development

FT.com / Africa - Corruption probe into sale of Ghana oil block .

The FT reports:

US and Ghanaian authorities are investigating corruption allegations involving a Texas oil company and the local partner that helped it secure control of the Ghanaian oil block that yielded one of Africa’s biggest recent discoveries.

The case risks complicating efforts by Texas company Kosmos to sell its stake in the Jubilee oil field to ExxonMobil in a deal valued at $4bn. Kosmos, which denies any wrongdoing, is owned by US private equity groups Blackstone and Warburg Pincus.

According to people close to the investigation, Ghana is preparing to file criminal charges against EO, a company set up by two political allies of John Kufuor, former president, whose party lost tense elections a year ago. The US justice department is also understood to be probing the relationship between EO and Kosmos, although the department on Thursday declined to confirm or deny this.

Duke Amaniampong, a California-based lawyer working for the Ghanaian investigation told the Financial Times that Ghana’s attorney-general had accumulated “enough evidence of criminal culpability to bring charges against the EO group and its directors”.

The charges would include “causing a financial loss to the state, money laundering and making false declarations to public agencies”, said a person in the attorney-general’s office.

I don’t know the rights and wrongs concerning these allegations.

I do know that transparency in Extractive Industries deals is vital.

And I do know that full transparency about the beneficial ownership, real management and financial performance of companies, where ever registered, is also vital if corruption is to be prevented.

Which is precisely what the New Haven Declaration is all about.

Richard Murphy Corruption, Development

Global Financial Integrity (GFI) released today a statement — dubbed the New Haven Declaration — which debuts a new partnership between humans rights and financial transparency advocacy groups.  Today’s announcement follows a meeting of prominent human rights and financial transparency organizations at Yale University in early December, 2009.  The groups discussed the link between illicit financial practices, secrecy in global finance and their adverse impact on human rights.

"The links between human rights and financial transparency are undeniable," said GFI Director Raymond Baker.  "An estimated $1 trillion is siphoned out of poor countries annually.  Further, some 18 million people die each year from causes stemming from economic deprivation.  Of these, ten million are children under the age of five who die from diseases for which vaccines are available."

"The New Haven Declaration makes clear that the solution to these interconnected problems lies in increased transparency and accountability in the global financial system," said Baker.

Signed by such groups as Amnesty International, Human Rights Watch, Oxfam, Global Financial Integrity, the Center for Applied Philosophy and Public Ethics, the Open Society Institute Justice Initiative, Tax Justice Network, and the National Council of Churches, the following statement "represents a vanguard partnership in human rights, economic development, global poverty alleviation, and global financial accountability," said Baker.

The statement and list of signatories follows:

New Haven Declaration On Human Rights and Financial Integrity

Human rights and international financial integrity are intimately linked.  Where poverty is pervasive, civil, political, and economic rights often go unrealized.  Today, large outflows of illicit money - many times larger than all development assistance - greatly aggravate poverty and oppression in many developing countries.

Illicit money leaves poorer countries through a global shadow financial system comprising tax havens, secrecy jurisdictions, disguised corporations, anonymous trust accounts, fake foundations, trade mispricing, and money-laundering techniques. Much of this money is permanently shifted into western economies.

Reducing these illicit outflows requires greater transparency and integrity in the global financial system. Achieving this is a prerequisite to creating an economic framework that is open, accountable, fair, and beneficial for all.

We call upon the United Nations, the G8, G20, WTO, IMF, World Bank, and other international fora, as well as on national governments, world leaders, faith groups and civil society organizations to recognize the linkage between human rights and financial transparency. We further call for decisive steps to ensure that developing countries can retain their resources for sustainable growth and poverty alleviation, which they must achieve if the human rights of all people are to be realized.

The undersigned individuals and organizations shall be working together in the coming months to pursue this agenda and look to add additional voices to this effort.

Amnesty International
Human Rights Watch
Oxfam
Global Financial Integrity
Center for Applied Philosophy and Public Ethics
Open Society Institute Justice Initiative
Asia Initiatives
Task Force on Financial Integrity and Economic Development
Tax Justice Network
Christian Aid
National Council of Churches
Harrington Investments, Inc.
Asociación Civil por la Igualdad y la Justicia
Thomas Pogge, Yale University
Robert Hockett, Cornell University
Frank Pasquale, Seton Hall

I have now added my name to that list.

Click here to read Raymond Baker, Thomas Pogge, and Arvind Ganesan’s op-ed in the Huffington Post introducing the New Haven Declaration.

Richard Murphy Corruption, Development, Secrecy jurisdictions, Tax Havens

ICAS executive director of technical policy, David Wood has added his voice to the campaign by Christian Aid against tax avoidance by companies working in the developing world.

View the video here.

It’s good to see a spokesperson for a professional institute standing up and being counted in this way.

I look forward to more joining him.

Richard Murphy Accounting, Development, Ethics, Tax avoidance