Absence of data implies a need for more transparency

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From the FT:

Sir, As organisations working on the issue of illicit capital flows out of developing countries, and including authors of many of the papers reviewed by the Oxford University Centre for Business Taxation (“Treasury in drive to extend global tax clamp”, June 22), we write to express our disquiet about the centre’s conclusions.

We welcome greater attention to these issues, including profit-shifting by multinational companies. We are all open to constructive criticism of our work. We all want to improve knowledge in this critical area. But it is not reasonable to treat absence of the data needed to conduct strictly conventional analysis as evidence of absence of a problem. Instead, this implies that more transparency is needed — something on which we are all agreed.

The UK government and the World Bank are committed to taking this important research agenda forward. It is a shame that such prominence was given to a first contribution from researchers whose expertise in corporate finance, rather than development, has perhaps hindered their ability to consider problems where data are inevitably limited.

Following Devesh Kapur’s article “Academics need to declare more than their genius” (June 24) stressing the need for potential conflicts of interest to be declared by academic economists, it may be worth noting that the centre is funded by, and was established with an endowment from, the Hundred Group of UK multinational companies.

The study’s authors do conclude that “more research is needed to improve our understanding of tax avoidance and evasion and the implications of these activities for revenue mobilisation in developing countries”. That much is certain.

John Christensen,
Director, Tax Justice Network International Secretariat

Alex Cobham,
Policy Manager, Christian Aid

Richard Murphy,
Director, Tax Research LLP

Anna Thomas,
Head of Economic and Social Development, ActionAid