Good news is coming in waves from the EU.
First there was support for country-by-country reporting.
Then support for a Robin Hood Tax.
And third - yesterday the EU Parliament passed a resolution calling for more EU tax-related assistance and clamp downs on tax evasion and tax fraud to boost revenue and efficiency in the developing countries. As the Parliament noted (slightly edited):
The tax and development resolution, drafted by Development Committee Chair Eva Joly (Greens/EFA, FR), says that EU and developing countries should seek to boost their tax revenues by combating tax evasion and harmful tax practices. This, it says, will not only reduce poverty but also eventually lead to a "governance dividend".
The tax and development resolution calls for more tax-related development assistance from EU Member States and a clampdown on tax havens. Developing countries should at the same time reduce their reliance on foreign aid, by putting in place viable tax systems, it adds. Recent studies suggest that revenue loss due to tax fraud amounts to ten times the development aid injected into the economy. As much as €800 billion is lost annually from developing countries to tax havens and illicit financial flows, it adds.
Multinationals should be prevented from "transferring their profits to countries with the most favourable tax regimes" and should pay their taxes in the countries where they actually generated the profits, says the tax and development resolution. One way to combat harmful tax structures would be to withdraw banking licences from banks that work with tax havens, say MEPs.
The Parliament's tax and development resolution criticizes a European Commission paper on promoting good governance in tax matters for ignoring the fact that trade liberalisation, and in particular economic partnership agreements, substantially reduce the customs revenues of low-income countries.
The Joly report was adopted by a show of hands.
I know this is non-binding. But it's a powerful statement of political support for these issues and I warmly welcome that as another important step forward in beating tax abuse and tax havens and the drain they put on developing countries.
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Great stuff Richard!!!
It’s coming thick and fast… I might have to reconsider my economic nationalism if the EU continues at this rate
I forgot to click the tick box to notify me of follow up comments
Richard. Much of this good news is thanks to your enduring efforts.
The Spanish have a motto (Spain is a good country to seek advice on taxation; albeit evading it).
“Sin prisa sin pausa”
“Without haste without pause”
Algirdas Gediminas ?†emeta (a Lithuanian economist with a degree as a economist-mathematician) is the European Commissioner for Taxation and Customs Union, Audit and Anti-Fraud.
He is a driving force behind the attempt to force international companies to pay their (Corporation) Taxes in the countries where they produce. He is also affiliated to the European People’s Party, which has decided centre-right perspectives.
Consensus appears to be growing for country by country reporting from all spectrums of politics. Bravo!
There are plenty of organisations pushing – or being pushed – in the opposite direction.
For example, you have individuals at an institution such as the Commonwealth Secretariat – supposedly an association ‘working together towards shared goals in democracy and development’ – commissioning a report only last year to demonstrate that tax havens boost economic growth in developing countries, help alleviate poverty, and that flows of capital from the developing world are usually invested back in the country of origin.
http://www.ifcfeed.com/documents/Sharman%20-%20International%20Financial%20Centres%20and%20Developing%20Countries.pdf
http://www.stepjournal.org/news/news/archive/2010/july/tax-neutral_ifcs_help_develop.aspx
The report finds that there is insufficient evidence to support “the two common misconceptions” surrounding tax havens: that they drain wealth from developing countries or that they are used for tax avoidance.
Cyrus Rustomjee, Director of the Economic Affairs Division from the Commonwealth Secretariat is reported as saying:
“We welcome this study as an important contribution in enhancing the understanding of the role which these centres play in the global financial system and supporting economic development in developing countries”
http://www.ifcfeed.com/articles/detail.aspx?articleid=3398&categoryid=60&loc=2
@Sixpence
I agree
the Commonwealth secretariat is quite bizarre in its approach
The tiny states in it are abusing the major ones – no doubt with the quiet backing of London