The second quarter 2007 edition of Tax Justice Focus (TJF) is a special edition on accountability, co-edited by Nicholas Shaxson and John Christensen. A central theme of this issue is that taxation helps foster political accountability - and that this outcome has been all but forgotten, especially in poor countries.
In the editorial, "Wake Up, Donors", we consider why aid donors have been so reticent about engaging on tax. By and large this is a field that has been left to technical specialists, who frequently treat the issue in isolation from its political dimension and therefore seldom pay attention to the vital role that taxation plays in maintaining lines of accountability between governments and the citizens they rule. We argue that donor agencies need to wake up to this issue, not just because good taxation fosters better governance, but also because the endgame for the donor community should be to reduce reliance on external funding and increase the ability of poorer countries to finance their public services from tax revenues.
Alex Cobham discusses why an international consensus that has grown up around taxation has failed to meet the Four-R tests of good taxation policy: raising Revenue for public expenditure; Redistributing wealth and income; Re-pricing goods and services to adjust consumption behaviour; and fostering better political Representation. Alex concludes that the Tax Consensus needs to be overthrown and replaced by tax systems geared to achieve genuinely sustainable development.
Other key articles include:
* Mick Moore and Nardia Simpson of the Institute of Development Studies explore the links between taxation policy and good governance, and outline practical steps that can contribute to fostering a more consensual relationship between taxpayers and government.
* Richard Murphy, a campaigning Chartered Accountant and senior adviser to TJN, describes the current campaign to strengthen corporate accountability by introducing an international financial reporting standard for country-by-country reporting. This apparently obscure measure for increasing corporate transparency could transform the quality of information made available to revenue authorities.
* Prem Sikka, director of the Association for Accountancy & Business Affairs, reviews the case for a Code of Conduct on Taxation, and considers how TJN's Code of Conduct, which is being finalised for launch in October 2007, will contribute to the emerging global debate about the respective roles of governments, taxpayers and their advisers or agents.
This edition also covers the launch of the Tax Justice Nederland and covers the high level conference on Illicit Financial Flows organised by Raymond Baker's team in Washington at end-June. It also includes important feedback from the first meeting of the African Steering Committee held in Cape Town in June, plus a review of Adrian Henrique's book - Corporate Truth- the limits to transparency.
The pdf version of this edition, which is published in a screen layout suitable also for printing on standard A4 paper can be downloaded here.