I made this comment yesterday after the G7 tax deal was announced:
I have been asked what the biggest impediments to delivery of the new G7 tax deal are. Based on my experience at the OECD from 2013 - 2015 it’s easy to name them as PWC, Deloitte, EY and KPMG, who between them underpin the world’s tax havens.
— Richard Murphy (@RichardJMurphy) June 5, 2021
The comment was based on observation of what happened on country-by-country reporting, and my research.
The Big 4 all did all they could to oppose country-by-country at the OECD, although EY were the most aggressive, by some way.
As for research, work I did with Saila Stausholm at Copenhagen Business School showed just how fundamental the Big 4 are to offshore. Quite literally, they are the common thread without which the offshore world could not operate. Expect some opposition in that case. And most especially, expect them to open loopholes, because that is what they thrive on.
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All I see is PR at the moment.
The whole thing seems riven with Neo-liberal sleeper agents/handmaidens who as you say will open up loop holes – starting with Sunak himself.
I reman hopeful that something more effective can be built onto it in the future.
The Big 4 may dislike it in some sense but in another they will love it. The scope for complexity and so potential for advisory fees is enormous. The US tax system is a total mess already with many companies providing for potential tax liabilities which may never arise but are deemed in some way to be a risk of arising on a sliding scale of interpretation. Other tax jurisdictions have equally complex tax rules open to a variety of interpretations giving scope for fees to be earned both from accountants and legal firms. I haven’t seen any detail around this proposal but it seems to me that it opens up a whole new world of opportunity for Big 4 accountancy firms.
Your point – an example
State Capture — South African Railways & one of the Big Four
Transnet: More than R40-billion looted
Undoubtedly, one of the key government departments at the centre of the Gupta State Capture spree has been Transnet. Since 2018, the Zondo Commission has led evidence that points to officials such as former CEOs Brian Molefe and Siyabonga Gama, along with financial chiefs Garry Pita and Anoj Singh, who signed off dubious contracts with Gupta-linked companies such as Trillian and contracts for the ill-fated 1,064 locomotive deal.
This all cost Transnet R40,084,201,927, according to Holden. Transnet made transactions and payments directly related to the Guptas totalling 81.59% of the total money lost to State Capture.
. . . . . . . . . .
It was announced in May that McKinsey, which did business with Transnet along with Regiments Capital, had repaid R780-million plus interest from projects done there. In March, it was reported Transnet and the Special Investigating Unit (SIU) had approached the courts to have the locomotive deal set aside.
I have published this but have not verified the claims made