Welcome to the Tax Justice Network November 2016 Podcast! In this month’s Taxcast:
– Tax Inspectors Without Borders – we look at a practical project that’s changing lives and aiming to level the global playground of tax-minimising multinational companies.
– Plus: what does new US President Trump mean for tax justice?
– And, in Trusts we trust? The French Constitutional Court upholds a challenge to France’s trailblazing public register of Trusts: what does it mean for progress on financial transparency?
We recently helped publicise a report by the UN Conference on Trade and Development (UNCTAD) in our blog entitled Some countries “lose” 2/3 of exports to misinvoicing. As a reminder, trade misinvoicing is a form of money laundering that involves deliberately misreporting (on an invoice to customs) the value of a commercial transaction, so as to shift money illictly across borders. The study seeks to get a handle on the scale of the problem by studying mismatches between export data from the exporting countries (Chile, Cote d’Ivoire, Nigeria, South Africa and Zambia, in this case), and values reported by the importing countries, including hubs such as Switzerland, the Netherlands, the United Kingdom and United States.
There’s been some pushback against the UNCTAD study since we wrote that, and there’s lots to welcome here. In particular, the South African component in the report has prompted both business interests and South Africa’s respected chief statistician, Dr Pali Lehohla, to criticise the assessment.
From UNCTAD, the UN Conference on Trade and Development, via email:
“Some commodity dependent developing countries are losing as much as 67% of their exports worth billions of dollars to trade misinvoicing, according to a fresh study by UNCTAD, which for the first time analyses this issue for specific commodities and countries.
Trade misinvoicing is thought to be one of the largest drivers of illicit financial flows from developing countries, so that the countries lose precious foreign exchange earnings, tax, and income that might otherwise be spent on development.”
Via Martin Hearson’s website, here is a new report he authored for Tax Justice Network-Africa. As Hearson says, it’s based on field research done a year ago and has been a little while getting into print.
Among many other things, the report highlights the extent to which tax treaties — which have profound implications for how the tax revenues from cross-border investments are shared between countries (see here) — have been negotiated amid highly unequal power relationships:
Who runs our countries: us, or global finance? Fools’ Gold – rethinking competition
UK’s bank levy reforms will cost £4.2bn in tax over 5 years Fools’ Gold – rethinking competition
Great new IMF paper puts women’s rights at the heart of tackling income inequality Oxfam
Read here for more on Inequality and Democracy.