Global Financial Integrity has released the following video along with a letter from GFI Director Raymond Baker. The video encourages individuals to combat one of the oft-neglected causes of poverty, illicit financial flows, by urging the G20 to create financial transparency. It’s one of the best videos of its type I’ve ever seen.
The letter says:
Dear Supporter,
For over half a century – western aid organizations have admirably worked to alleviate poverty in developing countries. Despite these efforts, over 3 billion people-or half the world-live on less than $2.50 per day. Indeed, more people live in poverty today than at any other time in human history.
That’s because for every 1 dollar in foreign aid sent to developing economies, 10 dollars is flowing out illicitly. In fact illicit financial flows from developing economies total $1 trillion every year-10 times the amount of foreign aid received.
But there is hope! We can curtail the devastating effects of dirty money by urging the G20 to create financial transparency in the international banking system.
Today, Global Financial Integrity released a video urging people to do just that. The video, titled “Who Suffers?” explains this problem and urges people to take action by signing the petition to the G20 at www.G20Transparency.com. Please join us in our fight by forwarding this video to your friends and family.
Best Wishes,
Raymond Baker
Global Financial Integrity
Please do support this campaign.
Disclosure: Global Financial Integrity and Tax Research LLP are both members of the Task Force on Financial Integrity and Economic Development
Richard Murphy Corruption, Development, Secrecy jurisdictions, Tax Havens, Tax evasion
MPs act to stop vulture funds using UK courts to pursue poor nations | Business | guardian.co.uk .
Vulture funds would be banned from pursuing the world’s poorest countries for debts in the UK courts, under a private member’s bill that has won the backing of the government.
MPs will vote on the second reading of the debt relief (developing countries) bill, sponsored by Labour backbencher Andrew Gwynne, on Friday. The Treasury has repeatedly promised to tackle the problem of investors suing poverty-stricken governments, often over debts contracted decades ago.
So-called vulture funds buy the debts of poor countries, usually at a sizeable discount, wait until the government has received debt relief from foreign creditors, and then pursue their share of the debt in courts around the world.
Vultures are invariably based in tax havens / secrecy jurisdictions. This is an essential development to stop yet another offshore abuse.
Congratulations to all involved.
Richard Murphy Development, Secrecy jurisdictions, Tax Havens
I don’t always agree with George Monbiot, but he’s on form this morning, writing:
It’s a bitter blow. When the government proposed a windfall tax on bonuses and a 50p top rate of income tax, thousands of bankers and corporate executives promised to leave the country and move to Switzerland. Now we discover that the policy has failed: the number of financiers applying for a Swiss work permit fell by 7% last year. The government must try harder to rid this country of its antisocial elements.
Executive flight is the corporate world’s only effective form of self-regulation: those who are too selfish to pay what they owe to society send themselves into voluntary exile. It’s an act of self-sacrifice for which we should all be grateful. It’s hard on the Swiss, but there’s a kind of mortal justice here, too: if you sustain a crooked system of banking secrecy and tax avoidance, you end up with a country full of crooks and tax avoiders.
As he concludes:
These efforts [to tackle tax abuse] scarcely scratch the problem. International attempts to close down tax havens remain halfhearted. But if, by some miracle, these measures were to succeed, one haven – let’s say St Helena – should be kept open. It should be furnished only with rudimentary homes. All who chose to could live there in peace. Every penny they possessed would remain safe from the taxman, as long as they never set foot in another land. They could sit in their cells and count their money for the rest of their lives. Parties of schoolchildren would be brought to the island to goggle at these hermits, and learn some lessons about the follies of wealth.
And I’ll guarantee you this, there are plenty enough sad people that there would be queues to live there. The world would, as George rightly says, be a better place without them.
Richard Murphy Secrecy jurisdictions, Tax Havens, Tax avoidance
The Finance Minister of India Shri Pranab Mukherjee spoke to a seminar on transfer pricing yesterday and said:
The structure and the location of the group entities of the multinational enterprises exploit the favourable tax regime offered by the low tax jurisdictions and tax havens. This has lead to accumulation of wealth and shifting of intellectual capital to these jurisdictions. The role of tax havens and low tax jurisdictions has become an area of great concern for a country like India which is putting its all acts together to mobilize resources to attack on poverty and illiteracy.
The financial crisis faced by us has been unprecedented in recent history. It is widely believed that the tax havens and low tax jurisdictions were an important actors in the crisis. The opaque system of Exchange of Information in these tax havens and their non-compliant behaviour has been a matter of concern not only for revenue base but also linked to financing of activities which are detrimental to national security interest.
It is in our mutual interest to maintain a healthy global fiscal system which is self-sustainable and all important actors including the tax havens comply with the established norms of transparency and fiscal discipline.
I think that says a great deal in a very few words that summarise much of what the Tax Justice Network has been seeking to raise awareness of, and change.
The awareness is now commonplace. Change is happening.
We need to celebrate the good news sometimes.
Hat tip to Martin Hearson, Action Aid
Richard Murphy Development, Secrecy jurisdictions, Tax Havens, Transfer Pricing
Gulf Times – Qatar’s top-selling English daily newspaper - Finance & Business.
The French government will impose heavy taxes on domestic firms that have any kind of establishment in 18 countries it has designated as tax havens, the daily newspaper, Le Figaro, reported yesterday.
The tax on dividends, interest and licence fees that flow through these tax havens will be hiked from 15 to 50%.
In addition, a 95% tax exemption on dividends paid by subsidiaries to parent companies will be annulled if the subsidiary is active in one of the countries on France’s blacklist.
Others will follow.
The power of finance in these locations to cause harm has to be broken.
Richard Murphy Secrecy jurisdictions, Tax Havens
FT.com / Money / Current Issue - Advisers warn investors over offshore bonds.
Some advisers refuse to recommend offshore bonds, however. Charles MacKinnon, head of Thurleigh Investment Managers, describes the products as “toxic waste”. He argues that the products come with relatively high fees – about 150 basis points a year – and have restricted investment choice.
Need I say more?
Richard Murphy Secrecy jurisdictions, Tax Havens
FT.com / Asia-Pacific / India - China makes foray into Mauritius .
As the FT notes:
China’s state-led approach to foreign investment is muscling India aside in its traditional “backyard” by investing $700m in a special economic zone in the Indian Ocean island of Mauritius to service Beijing’s expansion in Africa.
Ramakrishna Sithanen, the vice prime minister of Mauritius and minister of finance, said China was “extremely aggressively” pursuing its objectives in Africa via Mauritius with a wave of strategic investments on the island.
Let’s put this another way - the use of Mauritius as a quite abusive tax haven continues. That’s the real truth here.
Richard Murphy Tax Havens
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
U.K. Treasury Confirms 10,000 Tax-Amnesty Disclosures - WSJ.com.
The Wall Street Journal reports:
Ten thousand people have disclosed previously undeclared offshore income and gains under the U.K. government’s New Disclosure Opportunity tax amnesty, meaning revenue authorities can begin collecting unpaid tax, interest and penalties, the U.K. Treasury said Thursday.
“Now the NDO is closed, [HMRC] is beginning the job of using the data we have obtained from banks to identify people who have not made disclosures despite having hidden their money offshore,” said Dave Hartnett, the permanent secretary for tax at the Revenue and Customs department. “We are starting our investigations, and penalties can be up to 100% of the tax not paid.”
There’s going to be a great deal to do. In the two amnesties in 2007 and 2009 (now closed) about 53,000 people have admitted offshore tax evasion.
What is very clear from data from the Crown Dependencies alone is that this is only a small proportion of the total number of accounts held there on which non-disclosure of income earned to HM Revenue & Customs has been requested.
I just hope adequate resources are now made available to tackle this issue with considerable vigour as is essential. That means, I suggest, a positive recruitment process of high grade staff, strong admin support to pursue considerable numbers of people and a ’shock’ regime designed to create real fear amongst those who are acting (and let’s be blunt about this) criminally at cost to the rest of us in society.
Richard Murphy Secrecy jurisdictions, Tax Havens, Tax evasion
I’m biased about this one, but I warmly recommend it.
Richard Murphy Secrecy jurisdictions, Tax Havens
