A new research report published today looks at the current state and future prospects of a global public database of corporate accounts. We are cross posting this OpenDemocracy article written by Jonathan Gray, with permission from our partners on the open data for tax justice project at Open Knowledge International. You can read more about that about in our blog here.
The multinational corporation has become one of the most powerful and influential forms of economic organisation in the modern world. Emerging at the bleeding edge of colonial expansion in the seventeenth century, entities such as the Dutch and British East India Companies required novel kinds of legal, political, economic and administrative work to hold their sprawling networks of people, objects, resources, activities and information together across borders.
How much tax do multinational companies pay in your country? Leading tax justice campaigners (including the Tax Justice Network) and open data specialists are working on helping you find out with their open data for tax justice project. Today they’re publishing a white paper entitled What Do They Pay? which sets out a roadmap for the creation of a global public database on the tax contributions and economic activities of multinational companies. More details about the project can be found at datafortaxjustice.net. Hashtag for following developments on social media is as you see it on the right #od4tj
Over the years, we’ve chronicled the tax haven denial of many secrecy jurisdictions, even building a partial list of those who have publicly claimed “We are not a tax haven!” Now, at the prompting of tax twitter (notably Mary Cosgrove and Stephanie Johnston, with honourable mentions to Aisling Donoghue, Toby Quantrill and Richard Smith), we thought we’d have a go at crowdsourcing a more full listing.
This is being done as part of the Open Data for Tax Justice project which TJN and our partners at Open Knowledge International have set up with Omidyar Network support, to which new members are always welcome (our major focus at the moment is on the creation of a public database of country-by-country reporting – on which your views are sought).
TJN has, since its establishment in 2003, led the way in developing and promoting the idea of public country-by-country reporting (CBCR) for multinational companies. Open Knowledge International, who partnered with TJN in establishing Open Data for Tax Justice (#OD4TJ), are pioneers in using open data to achieve tangible policy results and human progress. The Financial Transparency Coalition (FTC) has championed public CBCR since its inception, as have many of our fellow FTC members including Christian Aid and Tax Justice Network-Africa.
There are now multiple requirements for CBCR from multinational companies, depending on the jurisdiction and industry sector, some fully public, and an OECD standard has been introduced which will require all multinationals of a certain scale to report privately to the tax authority in their headquarters country. It is critical that this data is used effectively, and seen to be so used. The next 2-3 years provide a window in which to confirm the value of CBCR; to move policymakers towards a global consensus on requiring public CBCR; and to establish a single format for reporting, to ensure lower compliance costs for business and more effective use of the data by civil society, media and tax authorities alike.
As leading organisations in this field, we now propose to establish an open database, to include all publicly available CBCR data; to provide a venue for multinationals that wish to lead in transparency by publishing their data voluntarily; and to make the data, and core tools and risk measures, accessible to a wider audience.
It’s important that we have a wide range of views and voices feeding in to the process, to ensure the design meets the key user needs. To that end we are working on a range of channels. First among these is an international survey that we would urge as many people and organisations from around the world as possible to fill in.
Next week we will convene an international expert group meeting, to be followed in the coming months by data sprint/s and additional collaborative work to bring together open data, accounting and tax justice experts with the aim of delivering clear progress in four key areas:
- First, a common format nesting all of the existing CBCR standards will be created.
- This will be used to construct, second, an open, online database into which researchers can enter new CBCR data as it becomes available, and which has the potential to become the main repository for public CBCR data, and the main source for future research and policy analysis.
- Third, we will create a number of tools and indicators of the misalignment of declared, taxable profit with the location of real economic activity; and the ability quickly to rank and compare across companies and across jurisdictions in order to identify priorities for further scrutiny.
- Finally, the aim is to ensure the database is fully linked in with related projects including, crucially, to establish relationships with the increasing volume of beneficial ownership data available, including through potential partners such as OpenCorporates and Open Contracting.
The intention is to obtain over time significant backing from a range of users including investor groups, reporting companies, civil society groups, tax authorities and policymakers. Please get in touch if you would like to be involved in any way, via Open Data for Tax Justice – and please do fill in the survey!
Every year countries lose billions of dollars to tax avoidance, tax evasion and more generally to illicit financial flows. According to a recent IMF estimate around $700 billion of tax revenues is lost each year due to profit-shifting. In developing countries the loss is estimated to be around $200 billion, which as a share of GDP represents nearly three times the loss suffered by OECD countries. Meanwhile, economist Gabriel Zucman estimates that certain components of undeclared offshore wealth total above $7 trillion, implying tax losses of $200 billion annually; Jim Henry’s work for TJN suggests the full total of offshore assets may range between $21 trillion and $32 trillion.
We want to transform the way that data is used for advocacy, journalism and public policy to address this urgent challenge by creating of a global network of civil society groups, investigative reporters, data journalists, civic hackers, researchers, public servants and others.
Today, Open Knowledge and the Tax Justice Network are delighted to announce the launch of a new initiative in this area: Open Data for Tax Justice. We want to initiate a global network of people and organisations working to create, use and share data to improve advocacy and journalism around tax justice. The website is: http://datafortaxjustice.net/ and using the hashtag #od4tj.
The network will work to rally campaigners, civil society groups, investigative reporters, data journalists, civic hackers, researchers, public servants and others; it will aim to catalyse collaborations and forge lasting alliances between the tax justice movement and the open data movement. We have received a huge level of support and encouragement from preliminary discussions with our initial members, and look forward to expanding the network and its activities over the coming months.
What is on the cards? We’re working on a white paper on what a global data infrastructure for tax justice might look like. We also want to generate more practical guidance materials for data projects – as well as to build momentum with online and offline events. We will kick off with some preliminary activities at this year’s global Open Data Day on Saturday 5th March. Tax justice will be one of the main themes of the London Open Data Day, and if you’d like to have a go at doing something tax related at an event that you’re going to, you can join the discussion here.