Britain’s Second Empire: our May 2017 Tax Justice Network Podcast

May 24, 2017   Blog, Regular Features

In the May 2017 Taxcast: We talk to film director Michael Oswald about his new film The Spider’s Web: Britain’s Second Empire. Listen for details on how you can see the film.

Also, we discuss booming Sweden’s ‘reverse-Trumpism’: its economy grew almost twice as fast as the US last year – and it wasn’t achieved through cutting taxes. Plus: the Russian Parliament is considering sweeteners that would accelerate Crimea’s progress along the tax haven and secrecy jurisdiction route.

Featuring: film director Michael Oswald, John Christensen of the Tax Justice Network, author of Treasure Islands: Tax Havens and The Men Who Stole the World, Nicholas Shaxson, Alex Cobham of the Tax Justice Network, Member of the European Parliament Eva Joly. Produced and presented by Naomi Fowler for the Tax Justice Network.

You can download and listen to this month’s Taxcast anytime by right clicking ‘save link as’ here.

Africa subsidises the rest of the world by over $40 billion in one year, according to new research

May 24, 2017   Blog

Global Justice Now press release:

Download the report

Much more wealth is leaving the world’s most impoverished continent than is entering it, according to new research into total financial flows into and out of Africa.  The study finds that African countries receive $161.6 billion in resources such as loans, remittances and aid each year, but lose $203 billion through factors including tax avoidance, debt payments and resource extraction, creating an annual net financial deficit of over $40 billion.

The research shows that according to the most recent figures available in 2015:

  • African countries received around $19 billion in aid but over three times that much ($68 billion) was taken out in capital flight, mainly by multinational companies deliberately misreporting the value of their imports or exports to recuse tax.
  • African governments received $32.8 billion in loans but paid $18 billion in debt interest and principal payments, with the overall level of debt rising rapidly.
  • An estimated $29 billion a year was stolen from Africa in illegal logging, fishing and the trade in wildlife and plants.

Tim Jones, economist from the Jubilee Debt Campaign, said:

“The African continent is rich, but the rest of the world profits from its wealth through unjust debt payments, multinational company profits and hiding proceeds from tax avoidance and corruption.”

Aisha Dodwell, a campaigner with Global Justice Now said:

“There’s such a powerful narrative in Western societies that Africa is poor and that it needs our help. This research shows that what African countries really need is for the rest of the world to stop systematically looting them.  While the form of colonial plunder may have changed over time, its basic nature remains unchanged.”

Martin Drewry, director of Health Poverty Action said:

“To end poverty we need to focus our efforts on preventing the policies and practices that are causing it.  That means we need to stop our tax havens facilitating the theft of billions, clamp down on illegal activities and compensate African countries for the impact of climate change that they did not cause. “

Bernard Adaba, policy analyst with ISODEC in Ghana said:

“’Development’ is a lost cause in Africa while we are haemorrhaging billions every year to extractive industries, western tax havens and illegal logging and fishing. Some serious structural changes need to be made to promote economic policies that enable African countries to best serve the needs of their people rather than simply being cash cows for Western corporations and governments. The bleeding of Africa must stop!”

The report Honest Accounts 2017: How the world profits from Africa’s wealth, published by a coalition of UK and African organisations, including Global Justice Now, Health Poverty Action and Jubilee Debt Campaign, makes a series of recommendations as to how the system extracting wealth from Africa could be dismantled. These recommendations include promoting economic policies that lead to equitable development, preventing companies with subsidiaries based in tax havens from operating in African countries, and transforming aid into a process that genuinely benefits Africa.


The research covers the 47 countries classified as ‘sub-Saharan Africa’ by the World Bank.

The research was published by Global Justice Now, Health Poverty Action, Jubilee Debt Campaign, Uganda Debt Network, Budget Advocacy Network, Afrika and Friends Networking Open Forum, Integrated Social Development Centre, Zimbabwe Coalition on Debt and Development, Groundwork and People’s Health Movement.

For more information please contact Kevin Smith:

T (+44) (0)20 7820 4913 or (+44) (0)7711 875 345.

The Price of Entry: residence and citizenship by investment around the world

May 23, 2017   Blog

Many thousands of people a year risk their lives to cross borders into what they hope will be countries of greater safety, opportunity and quality of life. Yet for others who are wealthy enough, the borders are open. For those who can pay, nationality, residency and freedom of movement are theirs.

There are many concerns around the issues of residency (see our recent blog Faking residency on how the OECD’s Common Reporting Standard for automatic exchange of banking information leaves the door wide open for fraud).

Associate Professor Allison Christians, H. Heward Stikeman Chair in the Law of Taxation at the McGill University is currently doing some very interesting research on so-called ‘residence and citizenship by investment’, a handy kind of ‘fundraiser’ that many countries seem keen on implementing. Why does this matter? Well, there are many, many concerns about this, and as blogger Christian Wayne says of this research,

“The implications of the commodification of citizenship and access to immigration vis-à-vis pay-to-play visa programs has long been a hot-button issue for international tax scholars and political scientists alike. Most historical analysis, however, does not typically consider the role taxation dynamics between origin and host countries can play, nor how they impact the tax regime in terms of gross revenue or the distributional effect on the wider economy.”

And he goes on, Allison Christian’s interest in immigrant investment programmes

“is what she dubs “The Inequality Factor”—that is, how much can wealthier, more developed countries demand in terms of higher prices and more stringent requirements (such as actual residence in the host country) for entry, versus how much poorer, less developed countries can demand in price and commitments from their applicants. Christians cautions that her research is still ongoing, but “the answer seems to be that there appears definitely a ‘rich get richer’ quality to the distinctions among programs, but there are lots of details in the programs that require further thought.”

Those of you reading this who listen to our monthly podcast the Taxcast (also available here, here and on iTunes) will have heard us discuss the slippery world of ‘residence planning’ and specifically the ‘synthetic residency’ dodge offered by Dubai in our January 2017 episode (starting at around 6 minutes 57). And this shocking example really does highlight the issue of just how low these offerings can go and how far countries will compete in a race to the bottom. Regrettably, there are plenty more of these.

Now, here’s what Allison Christians has presented on her team’s findings so far on her blog, along with a very interesting graphic:

Price of Entry-25 April 2017

Faking residency: OECD’s Common Reporting Standard leaves the door wide open for fraud

The OECD’s Common Reporting Standard (CRS) for automatic exchange of banking information leaves the door wide open for fraud. The OECD has recently made available a form to report potential avoidance schemes of the CRS. While this form is a first useful step – we’ve been sharing with them the loopholes and risks we’ve identified, and a suggestion on how to assess countries compliance with the CRS. However, we haven’t seen anything get fixed yet…

While the lack of access to automatic banking information by developing countries is our major concern with the CRS (all as a consequence of the OECD’s arbitrary conditions, such as the need for reciprocity or to be chosen in return through the ‘dating system’), for those countries that will manage to exchange information with each other, other risks prevail. Most notably, the need to (effectively) determine the residency of each account holder.

Campaign victory disarms big tobacco’s lobby front in developing countries

May 22, 2017   Blog, Praise for TJN

Update: the Financial Times has covered the great news.

Below is a press release cross-posted from Tax Tobacco for Life, about a major campaign victory, which could save hundreds of thousands, even millions of lives in some of the poorest countries in the world. Here’s the quick story.

Big Tobacco has targeted lower-income countries as the only growth markets of the future, leading to projections of many millions of unnecessary deaths. Tobacco tax is perhaps the single most important tool to prevent this – and so the use of the International Tax and Investment Center (ITIC) to influence tax policy was a key part of the companies’ strategy for growth (that is, their strategy for death).

Following our joint campaign with many of the leading development and health groups (see note 2 below), and a major media splash in November, ITIC has now decided to drop its tobacco board members and sponsors. Victory!

Evading Tax and Avoiding Tax Evasion: for decades British governments have shied away from tackling cross border crime

May 19, 2017   Blog, Corruption, Secrecy, Tax Havens

Guest blog authored by Dr Michael Woodiwiss (Arts and Cultural Industries, University of the West of England) and Dr Mary Alice Young (Bristol Law School, University of the West of England)

Al Capone: tax evader

Al Capone: tax evader

In the 1920s, an embryonic tax collecting organisation was steadily growing in the US. The Internal Revenue Service (IRS) was an agency ignored by the majority of Americans. However, the tide turned in 1931 when the IRS secured the conviction of Chicago gangster Al Capone for tax evasion.

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