Search Result for Bono — 65 articles

The Edge: Ireland has ‘no problem’ with U2 tax status

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There's a great article in The First Post Daily under the above headline.

'The Edge' - Bono's best mate - has lashed out in the Baltimore Sun (for reasons best known to himself) describing:

the allegations about the band's tax matters as "totally false and possibly libellous".

He also claimed the Irish government had "no problem with U2 basing some of their business activities in Holland" and that "U2 and its members have paid many, many millions of dollars in taxes to the United States Internal Revenue Service over the years."

Oh dear, he still doesn't get it, does he?

Legality is not morality. U2s arrangements may be legal - in which case the Irish government may accept them. But they stink when this band demands action for the poorest countries in the world who suffer from abuse orchestrated through structures similar to those this band uses.

Candidly 'The Edge' looks like he's fallen over it. And if he's so tetchy maybe he needs to ask why that's the case. Has his conscience been pricked after all?

Bono Pay Up Weekend is upon us

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U2 heads the line up at Glastonbury festival this weekend and the stage is set for Art Uncut's events targeting their tax dodging.

Away from Glastonbury, at the Bull and Gate in Kentish Town, London,Art Uncut in conjunction with Big Society Entertainments is organising an evening of comedy and debate in support of the Fortnum & Mason 145. The comedians will be supported by a line up including TJNs very own stand-up economist, John Christensen, Lord Maurice "Blue Labour" Glasman, plus speakers from Christian Aid and Art Uncut.

Thank you Bono – now push this to its logical conclusion

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We're pleased that Bono, in an open letter to President Sarkozy published in Le Monde 27 Jan, calls out for transparency of tax reporting from the extractive industries. Bono urges President Sarkozy to engage in "transformational action" as he takes on the rotating presidency of the G20 for 2011.

So Bono, we'd like to write you an open letter in return. We have, in the past, criticised you for hypocrisy: calling for other people's taxes to be spent on aid, while shifting your financial affairs to the Netherlands to avoid tax. But you have a chance to make a difference, and we feel that you may be showing us that you get it - that tax is more important than aid. May we quote from your letter to President Sarkozy. Of the areas you say France needs to lead:

"The first is governance. Africa is rich in natural resources yet it is rarely Africans (save some corrupt officials) who get rich off their extraction. Meanwhile the missing cash risks fueling conflict across the continent. Transparency could change that. It could re-route revenues to kickstart economies and invest in jobs, health and education. The United States - prodded by activists like the ONE Campaign and visionaries like George Soros - recently passed historic legislation requiring energy companies to “publish what they pay” to officials. This is big. Could be even bigger than debt cancelation, in terms of the money it frees up for Africa's fight against poverty. It doesn't cost the US a single dollar, and it wouldn't cost France or Europe a single Euro to enact the same law and make it binding."

You call it governance, you are not using the word tax. But tax is revenue. While aid makes governments accountable to donors, debt makes government accountable to lenders, and oil makes government accountable to nobody - tax makes governments accountable to their citizens.

That's the way it should be.

And from our point of view, we're not talking just about extractive industries here - we are talking about all economic sectors. And here, tax is essential, crucial, to the governance question. (See this, for example.) 

And you talk about transparency. That means, from our point of view, and among other things, not routing funds through secrecy jurisdictions. The existence of these places provides a massive black hole for laundering proceeds of grand scale corruption.

Take away the veils of opacity and you create a massive deterrent for corruption. But we think you know all this. May we remind you again of how you say - "re-route revenues to kickstart economies and invest in jobs, health and education." 

We welcome that. And now are you ready to cease your own tax dodging? Set the example. We will welcome you. 



On closing our letter Bono, we are thrilled that President Sarkozy did in fact reply with an affirmation of action on transparency of reporting of revenues in the extractives industries. This is a welcome step forward indeed. President Sarkozy has become the first EU leader to go on the record publicly in support of EU legislation on the issue. The commitment comes in a letter addressed to Bono which has been published on the Elys?©e website, translated to English.

"In your article, you bring up the need for transparency in the area of natural resources’ extraction in Africa. I completely agree with you. France is organising an experts’ conference on this issue in March in Paris. As of now, I have decided to ask the European Union to adopt, as speedily as possible, legislation to compel industries in the extractive sector to disclose their payments to all countries in which they operate."

Extractive industries are a good place to start. Now let's press forward on all fronts.

NB: the above reposted from the Tax Justice Network blog, with permission

Barclays, tax havens and how to describe it

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Bob Diamond was before the Treasury Select Committee yesterday. Chuka Umunna, MP fr Streatham, was one of those questioning him. And as the Daily Mail notes, he tabled some new evidence on the use of tax havens / secrecy jurisdictions by Barclays:

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I admit I spoke to Chuka's office about this before the event, suggesting how they might find this data from the annual return forms of the bank.

It's not the first time I've offered that advice to someone interested in banks and tax havens. The TUC did something similar in 2009. I note they say I did the research, which was kind of them but a little unfair because as I recall it was actually done by Markus Meinzer and all I did was review it and explain why banks were required to disclose this information. As Chuka's team showed, it's not a hard exercise.

But it is revealing. First, it shows Diamond does not know the structure of the bank of which he is CEO. As the Mail notes:

Diamond was reduced to replying, 'I don't know' to a series of questions about how many subsidiary firms the bank had in countries such as the Cayman Islands and Isle of Man.

What does that say about its governance?

Second, we get back as ever to the language of such structures. Again, as the Mail notes:

'I can assure you Barclays is not evading taxes,' Diamond said.

But Umunna pointed out that Diamond knew all too well that he was referring to 'tax avoidance', not illegal evasion. Diamond preferred to categorise it as 'tax efficiency'.

So, we're back to tax efficiency. I can do no better than quote the Tax Justice Network on this issue, with a few changes to suit the context:

Tax efficiency is a term we hear rather frequently from the tax avoiding community. It does not mean that there will be any improvement in manufacturing productivity. No energy will be saved. No new jobs created. The quality of products will not improve, in fact, in conventional economic terms there will be no efficiency gain whatsoever.

When tax lawyers and corporate spokespersons utter the term "tax efficiency" what they really mean is that corporate shareholders will pay less tax as a result of shifting profits to tax havens. The inevitable outcome of such "efficiency" gains is that British citizens will either face further public service cuts or higher household tax bills.

What this reveals is a major flaw in the current structure of globalisation. Companies and rich people can locate wherever they are "tax efficient". Ordinary people lose out from the process. There is a term for this: its called the Bono Defence. Named after the Irish rock musician whose band shifted its tax base from now bankrupt Ireland to the Netherlands in the name of "tax efficiency", the Bono Defence provides stark warning that tax dodging doesn't promote better economics; it promotes failed states.

That's the nub of it. Barclays is taking your money.

And Diamond then has the gall to say that the tax his staff pay is paid by Barclays. From the Mail, again:

The American banker was also unable to produce figures for the amount of corporate tax the Barclays pays in the UK. He boasted that it paid £2bn of tax last year, but admitted that this included payroll tax paid by employees.

Of course, if we had country-by-country reporting Barclays would have to report how much tax they really paid in the UK, and that's why this is such a core demand for those wanting tax justice.

The evidence that Diamond heads a bank that is out of control - and about which he has remarkably little knowledge - seems compelling based on this performance. In that case maybe he too should understand the demand for country-by-country reporting - he might know a lot more about his own operations if the bank used it for its own reporting purposes.

India: a case of onions first, with a little help from country-by-country reporting

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It seems right to juxtapose two articles in the FT over the last couple of days. First this:

Manmohan Singh, India’s prime minister, already under fire over a multibillion-dollar telecoms corruption scandal, suddenly has a more down-to-earth problem on his plate – the skyrocketing price of onions.

Their price at India’s retail vegetable markets has doubled from Rs35 ($0.78) per kg to Rs80 in the past few days, angering consumers already feeling the pinch from a year of food price inflation and rising fuel prices.

And secondly this:

The Indian fixation with surpassing China’s rate of economic growth is “very stupid” as a measure of the nation’s advancement, Amartya Sen, the world-renowned scholar and Nobel laureate for economics, has warned.

Prof Sen on Tuesday said that such comparisons between the two rising economies were dangerously misguided, and recommended that Indian leaders pay more attention to reducing chronic undernourishment among their country’s 1.2bn people than pursuing ever higher growth targets.

“I don’t think the issue of India and China and which one will have a higher rate of growth is interesting at all,” Prof Sen told students and young entrepreneurs in the Indian capital. “It’s not a serious question how [India’s] 8.5 per cent compares with [China’s] 9.5 per cent.”

Mr Sen was responding to an obsession with India’s climbing growth rate among New Delhi’s policy elite, a focus that often overlooks whether greater activity in parts of the country translates into improved human development indicators.

Indians suffer some of the severest nutritional deficiencies in the world. Stunted development affects about half of the nation’s young children.

This is in no small part what the tax justice debate is about.

It is very easy to obsess about what happens in the UK economy but the truth is most of the people who started the tax justice debate did so out of a concern for developing countries – me included. Our concern is with real poverty – the sort where people can’t get the onions that are a part of their staple diet – because the market system is failing them – and the sort created by an obsession with the goals of neoliberal economics like GDP growth which have little or no impact on the lives of so many people for whom the grind of poverty is a reality around the world.

This was the reason for the creation of country-by-country reporting – endorsed by the FT yesterday – because we believe it will help ensure that the right amount of tax is paid in developing countries. It has many other benefits too – but that one was key to its creation and remains key to my reason for promoting it now.

No, it won’t restore an onion crop devastated by rains. But it will provide a government with resources to help manage the consequences and it will help a government tackle child under-nourishment with all its long term issues.

This is the hope we try to deliver.

If only the world’s major corporations might join in and deliver the same hope. They could if backed by a body – the International Accounting Standards Board – of which I said, what now seems a long time ago,:

The International Accounting Standards Board (IASB) has a chance to do something really powerful this week. It could with one decision do more for development than Live Aid or Live 8 achieved, outdo Bono, make tax evasion and corruption a great deal harder, help increase the tax revenues of most of the poor nations of the world and so bring real relief to their people and begin the end of aid dependency.

Of course that something was to recommend country-by-country reporting.

They ducked the issue then.

They duck it now.

And children have died as a result. Of that I have no doubt.

What do I want for Christmas? Country-by-country reporting, of course!

Why tax avoidance is a breach of contract

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I have the following post on the UK Uncut blog this morning. They used the title “If ever there was a campaign the Tories should support‚Ķ”:

“Those who oppose the UK Uncut tax protests argue – as the new head of the CBI did in the Observer today - that a company has a duty to be “tax efficient”. In saying this Carr argued:

"What are the rights, duties and responsibilities of any company? To ensure shareholders are correctly rewarded and to act in the right way for the organisation. Part of that is to be tax efficient. That's reasonable and appropriate."

He’s wrong. As the Tax Justice Network has argued:

Companies and rich people can locate wherever they are "tax efficient". Ordinary people lose out from the process. There is a term for this: its called the Bono Defence. Named after the Irish rock musician whose band shifted its tax base from now bankrupt Ireland to the Netherlands in the name of "tax efficiency", the Bono Defence provides stark warning that tax dodging doesn't promote better economics; it promotes failed states.

That’s a big claim, but one that is justified. Those like Bono and the CBI, and others from business and the right wing who argue tax efficiency is simply tax avoidance and tax avoidance is legal and so acceptable have entirely missed (or deliberately ignored) some enormous ethical issues when making their claims. For a description of what tax avoidance (and some of the other language used here about tax) means I refer you to my blog but the big issues can easily be explained.

First, just because something is legal does not mean it is ethical. Think apartheid in South Africa or even slavery in 18th century England and move on from there.

Second, remember that when you avoid something you go round it. That’s what tax avoiders do. They go round the law. How on earth can anyone, anywhere claim that getting round the law is ethical?

But perhaps most important is the fact that a limited liability company gives its shareholders in whose interest Roger Carr says it must be run the most phenomenal economic privilege: they cannot be sued for the debts the company incurs if all goes wrong even though they get all the benefit if things go right. That’s an astonishing privilege. It is not a right. I stress, it is a  privilege – and one that is granted by parliament on behalf of the people of the UK.

The privilege carries with it at least two implicit responsibilities. The first is to account for how the privilege is used – which means putting full and proper accounts on public record so we can know exactly what our companies are up to. The second obligation is to pay for the privilege – and that means complying fully and willingly with the tax (and other) laws passed by the UK parliament that creates them using exactly the same authority that they use to grant the privilege of limited legal liability. Of course these two obligations are also related – the accounts must properly explain how much tax is paid.

In combination these observations puts paid completely and utterly to Roger Carr’s argument that the company has a duty to its shareholders to be “tax efficient”. That’s not true. It has a duty to society to be tax compliant in exchange for the benefit of limited liability granted to its shareholders.

That then requires that companies be tax compliant. Tax compliance means seeking to pay the right amount of tax (but no more) in the right place at the right time where right means that the economic substance of the transactions undertaken coincides with the place and form in which they are reported for taxation purposes.

Tax compliance is a million miles form tax avoidance. Tax avoidance is about reducing a tax bill come what may without breaking the law, and not caring who else has to pick up the bill. Tax compliance is about trying to pay the right amount of tax, but no more. The last bit is important: no one has to voluntarily pay tax. But no one has to use a tax haven or a loophole either when the result is that the tax not paid by the company and its shareholders as a result will be shifted onto ordinary working people instead (and for the pedants who say this assumes tax is a zero sum game, my answer is it certainly  looks like it is from all the evidence over recent years of tax burdens shifting from capital to labour).

So, in that case what is UK Uncut doing? In summary it seems to me it is doing three things. First  it is trying to uphold parliament and the ethics of democracy – including voluntary compliance with the rule of law. Second it’s asking that people, and especially large companies, comply with the law – and not avoid it. And thirdly it’s saying that there’s a contract between the people of the UK and the people who own companies which is implicit in the granting of limited liability and that some who use companies are acting in breach of that contract. That is unacceptable and all UK Uncut are saying is that it’s time corporate UK honoured the obligations it has to fulfil in exchange for the privilege it has been granted.

Seen in this way it’s extraordinary that anyone can object to such a campaign. If ever there was a campaign that Tories should be turning out in force to support it’s this one, largely run by young people, that demands that people comply with the law and respect parliamentary democracy.

So the real question is, if they aren’t doing that, then why not? Could it be that they’re on the side of those who are in breach of their contract with society? “

Bono Aid

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From the First Post:

Amid all the debate about Ireland's financial woes and the subsequent bailout by British and European taxpayers, one voice has remained silent. Odd really considering that he is one of Ireland's richest inhabitants, certainly its most famous, a friend to presidents and kings, and someone rather fond of the sound of his own voice.

That man is Bono - lead singer of U2, political activist and, if his speech at a prayer breakfast attended by President Bush and Jordan's King Abdullah in 2006 still holds true, a seeker of justice for "the poorest of the poor".

"Holding children to ransom for the debts of their grandparents," he told the assembled dignitaries, "... that's a justice issue."

Well, could justice finally be served on Bono himself? Writing in the Irish Independent last week, columnist Kevin Myers pointed out that a possible upside of the country's current position was that it would finally expose the singer for the hypocrite he is.

"I imagine Bono has stayed silent on the Irish crisis," wrote Myers, "because the solution of it was always going to involve the abolition of the artists' tax exemption, which has now happened. He will be paying 53 per cent of his income in taxes, like the rest of us.

"Now we'll see how keen he is on giving government aid raised from taxpayers to developing countries - or will he simply flee to an easier tax regime?"

What’s the answer Bono?

Bono – where are you now?

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As I have mentioned here, more than once, over the last few years, somewhat I gather to his chagrin, Bono famously fled Ireland’s corporate tax regime in 2006 when the 12.5% rate proved too high for him and he shifted to the 5% regime of the Netherlands.

Now Ireland is being bailed out.

Will Bono play his part?

Will one of Ireland’s biggest exports choose to support his home state, or continue to tax avoid – however legally? Isn’t this a time when he has to ask the big questions, like whether it’s time to share the pain?

Come on  Bono – tell us what you’re going to do. Issue a statement, today.

NB having written this I noticed this here on the TJN site

Back to Bono

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Not a day goes by that someone does not visit this site to read about my ongoing relationship with Bono.

I noted in that context that the First Post Daily had an interesting article on the man today, which concluded:

Bono should put his own money where his mouth is. He should pay tax in Ireland and be transparent about where ONE's money is spent. Until then a line from U2's song of the same name rings rather too true:

"Did I disappoint you?"

Frankly, yes.

I second that.