Tax Justice Blog

New research on key role major economies play in global tax avoidance

An important new study on Offshore Financial Centres (OFCs) from the University of Amsterdam has made some fascinating discoveries, challenging, as the Financial Secrecy Index has, the popular misconception that tax havens are only palm fringed little islands and exposing that in fact major economies play a key role in global tax avoidance. Specifically they’ve mined data that highlights the central role of ‘conduit’ and ‘sink’ havens. Enter stage right the United Kingdom and the Netherlands…

In ‘Uncovering Offshore Financial Centers: Conduits and Sinks in the Global Corporate Ownership Network’ economists and computer scientists in the CORPNET research group have used:

“a data-driven method based on network analysis to identify OFCs. Our data covers over 77 million ownership relations, which together form a large network in which value flows from subsidiaries to shareholders. From it we extract millions of global corporate ownership chains (see Figure 2). The resulting fine-grained insight allows us to not only see where value originates and ends up, but also exactly where it originated. This allows us to identify two types of OFCs: 

  • Sink-OFC: a jurisdiction in which a disproportional amount of value disappears from the economic system.
  • Conduit-OFC: a jurisdiction through which a disproportional amount of value moves toward sink-OFCs.”

We explore Land Value Tax in the Tax Justice Network July 2017 podcast

July 20, 2017   Blog, Regular Features

In this month’s July 2017 Taxcast: we explore Land Value Tax and the billions in revenue we’re missing out on. Plus:

  • Tax Haven USA signs up to potential sanctions and blacklisting of the few nations still refusing to comply with international financial transparency rules, which would er, include itself as the world’s prime offender. Did Team USA read the small print? And will the G20, OECD and the EU really blacklist one of the world’s biggest economies?
  • Also, at last, Members of the European Parliament vote for public country by country reporting for the world’s biggest companies – but a last minute amendment was tabled…

Launch of international research collaboration, #AltAusterity

July 17, 2017   Blog, Policy

Today is the launch of #AltAusterity, a new, international research collaboration of which Tax Justice Network is a partner.  The project aims to stimulate public debate on the subject of austerity though high quality research. It is a response to the lack of evidence which has underpinned the current policy agenda on austerity.

The project comes together following a December, 2016 workshop which brought together national findings on the damage being done under the rubric of austerity – not least, the UK’s persistence with dramatic corporate tax cuts, despite the clear and unrefuted evidence of the lack of benefits the policy brings. (See our Alex Cobham’s presentation slides.)

Over the coming years we will explore austerity in terms of cuts to spending (‘fiscal consolidation’) and revenue (e.g. tax cuts), but also public sector restructuring and labour market reforms. Although there is substantial evidence that austerity harms rather than aids economic growth and that it disproportionately hurts the most vulnerable of society, it remains salient and prominent in everyday political and policy conversations in many countries.  Despite the growing public dissatisfaction with the policy, as expressed through the ballot box and protests.

RB tax avoidance – company calls for public country by country reporting after Oxfam report reveals profit shifting

Oxfam has today released a report on tax dodging by RB, the company formerly known as Reckitt Benckiser and the maker of thousands of well known household products.

The report looks at the 2012 restructuring of the company which saw it set up ‘hubs’ in the Netherlands, Dubai and Singapore, all well known corporate tax havens, and demonstrates the continuing power of the corporate expose as a mechanism for encouraging companies to change their ways. As a result of Oxfam’s work, RB itself is now calling on governments around the world to legislate to compel all multinationals to be transparent about the tax they pay though country by country reporting of key financial data.

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