For those of you out there celebrating Easter, Happy Easter!
Here’s a slightly delayed weekly roundup of news from the world of tax justice.
Trump Tax March
Over in the United States people in 150 different communities celebrated the holidays by marching to protest Donald Trump’s failure to release his tax returns. Donald Trump became the first presidential candidate in 40 years not to release his tax return during his campaign for the presidency.
A leaked page of his return released last year suggested he may not have paid taxes in 10 years.
The march was timed to coincide with the annual deadline for US citizens to file their tax returns with the US tax authorities. It seems a lot of people in the United States care about Trump’s tax returns…and it’s great to see the emergence of a new front in tax justice campaigning.
— Stephanie Scrafano (@stephscrafano) April 15, 2017
A huge story broke last Monday regarding Shell’s purchase of an oil block in Nigeria, OPL 245. It made the purchase with Italian oil giant ENI in 2011 and it’s been plagued with scandal since. After the deal was completed it emerged that a former Nigerian Oil minister Dan Etete had received a huge payoff, but there was always a question mark over how much the oil majors knew.
The global financial investigative journalism outfit Finance Uncovered (a project originally supported by the Tax Justice Network) got hold of a recording of the CEO of Shell discussing a raid on his offices as part of an investigation of the deal by Dutch prosecutors. Those recordings, and other emails also uncovered by the team shed new light on the deal.
The recordings revealed that the CEO knew that former MI6 officers employed by Shell had suspicions that money from the deal would flow into the pockets of senior officials, in what Mr van Beurden described as ‘loose pub talk’.
Following the revelations published on Monday, Shell for the first time admitted that it did indeed know that money might well end up in the hands of Nigerian officials when it bought the rights to the oil field. In a statement the company said:
“We knew that the Federal Government of Nigeria would compensate Malabu to settle its claim on the block,” Shell said in a statement. “Over time it became clear to us that Etete was involved in Malabu and that the only way to resolve the impasse through a negotiated settlement was to engage with Etete and Malabu, whether we liked it or not.”
The full story reads like a spy novel and can be found here in Nigeria’s Premium Times.
Aussie beer drinkers paying more in tax than big oil
Talking of pubs, Tax Justice Network Australia has been highlighting that Australian beer drinkers pay more in tax on each beer they purchase than the country’s enormous oil and gas industry pays in petroleum tax on offshore gas. Strewth! In fact it isn’t just beer drinkers. As the industry is currently paying nothing, then everyone is paying more in tax.
Tax Justice Network Australia is pushing for a reform of the country’s Petroleum Rent Resource Tax, and an additional royalty of 10% to make sure that the industry makes a fair contribution to Australian public services. A campaign site on the issue can be found here.
Tax Haven, Moi?
Luxembourg is continuing to insist that it’s not a tax haven. That’s despite the country’s own tax office signing off on thousands of deals with corporates allowing them to funnel money into the country and keep it there virtually tax free.
The latest forum where Luxembourg protests its innocence is in the state of Illinois in the US.
According to the Luxembourger Wort, the country’s ambassador to the US has written to the Illinois State government asking them to amend or reject a new law that would label the country as a tax haven.
The classification of tax havens has been of increasing interest to several US states because of the way the country levies corporation tax.
US states use a form of unitary taxation to tax their corporations, where each state looks at all of the profits made by a company in the US and then divides up the profit based on the amount of employees and/or sales the company has in their state. The state then gets to tax that profit. Recently some states like Illinois have been extending the reach of this taxation beyond the US to tax havens. This allows tax authorities to tax directly the money shifted to tax havens by companies.
Luxembourg’s ambassador has deployed a number of ingenious arguments as to why her country should be excluded from the Illinois list of tax havens, a charge which she describes as ‘factually incorrect’. Among them is the argument that the country shares the same rating as the US according to the OECD’s global forum on tax and transparency. Perhaps that says more about the utility of the OECD’s lists as a measure of tax havenry, rather than the tax haven status of Luxembourg…
Ugandan MPs, like many other jurisdictions, not interested in tax disclosure
As we reported previously in the wrapper, last month Finance Uncovered launched a project to encourage politicians around the world to disclose their tax returns. In total the organisation sent out around 7,000 letters to legislators around the world asking them to do this voluntarily. More on the project can be found here.
Jeff Mbanga, one of the project partners based in Uganda has written up the responses he received there. And it is disappointing. Of the 300 MPs contacted, less than 10 replied. Of those that did, one questioned why they were being ‘unfairly’ targeted.
One MP’s response is pretty amusing, claiming that it’d be wrong to disclose her financial affairs because of the large amounts of money she had to spend in order to get elected.
“It always hurts me when I meet people like you who only want to know about my financial status without knowing how I came here and how much did I spend,” Said Elizabeth Karungi, the Member of Parliament for Kanungu district.
She added: “I appreciate your interest but it is paramount that you equally take interest in condemning the much financial expenses we face before the electorates vote us.”
It seems that in Uganda, as in many other places in the world, politicians are happy to spend our money but are less happy to show us theirs!