Mark Bou Mansour ■ Landmark moments for tax justice from 2018 worth celebrating
From conference fringe talks to top of global agendas, tax justice issues have come along way since the turn of the millennium. Progress made in recent years, including the milestones reached in 2017, was held and built upon in 2018, cementing tax justice as more than just a fad –it’s a wholesale shift taking place across the world in how we see the role of tax in our responsibility towards each other and towards the planet.
In case you missed it, here are some of the exciting milestones that were reached this year by each of the Tax Justice Network’s workstreams.
Scale of injustice
Country pilots launched for illicit financial flow indicators of UN Sustainable Development Goals
UNCTAD and the UN Economic Commission for Africa are launching country pilots for our proposed indicators for SDG 16.4, which address the scale of multinational company profit shifting and of undeclared offshore assets. If the indicators are eventually established in the UN Sustainable Development Goals (SDGs), they will deliver jurisdiction-level accountability for both international tax avoidance and tax evasion which are estimated to cost hundreds of billions of dollars in lost revenues globally each year, providing the basis to drive powerful progress over the SDG period to 2030.
Two breakthroughs in country by country reporting
First, the OECD announced that it had obtained agreement to collate and publish aggregate data from the country by country reporting of multinational companies to tax authorities. This will ensure an annual publication, starting late 2019, of data that will not reveal individual company patterns but will show clearly which jurisdictions are benefiting and losing out overall from global profit shifting.
Second, with our support among others, the Global Reporting Initiative has launched a draft standard for fully public country by country reporting. The proposed standard, on which the public consultation runs until mid-March 2019, is dramatically more rigorous and technically robust than any current standards including that of the OECD. If adopted, it will automatically come into use for thousands of firms around the world and provide the basis for convergence of all other standards over time.
Tax justice and human rights
The UN made a historic recognition of the link between tax and gender justice
For the first time in the history of the UN Commission on the Status of Women, tax language was included in the Outcome Document (62nd Session). This marked a key moment for the tax and gender justice. Whereas macroeconomic policy, and tax issues in particular, have been seen as outside the scope of the UN Commission of the Status of Women, the inclusion of this language signals a growing awareness of the larger structural impacts of tax and macroeconomic policy on women and the fight for equality.
CEDAW reports call out states undermining women’s right through regressive tax policies
The Tax Justice Network collaborated with Queen’s University, Canada in both preparing a range of possible questions which relate to developing progressive taxation policies and creating a framework for financial transparency. Collaborative reports include reports on Luxembourg, Lichtenstein, Cyprus, New Zealand, UK and North Ireland. These ground breaking reports contribute to a growing body of evidence illustrating how state parties are falling short in their duty to respect, protect and fulfil women’s rights when they do not implement standards which legislate and regulate for progressive taxation and financial transparency.
The Committee on the Elimination of Discrimination against Women (CEDAW) is the body of independent experts that monitors implementation of the Convention on the Elimination of All Forms of Discrimination against Women. State parties are committed to submit national reports, at least every four years, on measures they have taken to comply with their treaty obligations. The CEDAW sessions comprise of, first, the preparation of a list of questions on a range of issues that impact on the rights of women to which the State parties are required to respond. Second, an assessment of the State parties response and the Committees Concluding Observations.
A new global strategy on tax and gender was set out by researchers and advocates from across the world
The Tax Justice Network is a key partner of the Global Alliance for Tax Justice’s (GATJ )and has, in particular, supported the work and strategic progress of the Tax and Gender Working Group. The working group provides a space for members of GATJ regional networks, partners and allies to engage in campaign and policy work on tax and gender. It also aims to strengthen the global integration of tax and gender justice organisations and broaden participation by working closely with GATJ regional networks, women’s rights organizations, global trade unions, international NGOs and CSOs. An initial convening of the Tax and Gender Working Group took place in November 2018 bringing together 30 plus representative researchers, advocates and activists from around the world to create a focused global strategic plan that will help to leverage regional and operational opportunities across the membership of the working group. Four long term objectives were adopted by the working group as a means of driving forward our collaborative work on tax justice, gender justice and women’s rights:
- Adoption oftax systems that recognise and redistribute unpaid care work and promote economic and gender equality.
- Advocate for support the creation ofpublicly available, ‘commonly reported’, relevant gender-disaggregated economic/revenue and demographic data
- Shift power from illegitimate decision-making bodies and strengthening and establishing new transformative platforms/mechanisms/institutions to deliver a feminist tax system for women’s rights and gender equality
- A vibrant social movement that promotes gender just/responsive tax systems
The meeting was supported by ActionAid, Bretton Woods Project, Christian Aid, GATJ, Network for Social Change and the Tax Justice Network.
We launched the Financial Secrecy Index 2018
The latest edition of the Financial Secrecy Index was published in January 2018. This was the most comprehensive edition so far, increasing country coverage from 102 jurisdictions in 2015 to 112. The top three worst offenders to global financial secrecy in descending order were Switzerland, USA and the Cayman Islands.
We added new indicators to the Index and enhanced existing ones, pushing the envelope on financial transparency forward. This included enhancing the assessment of beneficial ownership registration and regulations (eg assessing the thresholds of legal definitions and availability of information in open data format) and started analysing beneficial ownership regulation for freeports and real estate, pioneering these and other themes. These comparative in depth analyses and follow up technical policy papers are coming in timely as many countries around the globe are moving to establish beneficial ownership registries, supported by international bodies that are beefing up their requirements on beneficial ownership disclosures such as the Extractive Industry Transparency Initiative, the European Union and the Open Government Partnership.
We also launched the game-changing Bilateral Financial Secrecy Index
The Bilateral Financial Secrecy Index addressed the receiving side of financial secrecy, providing each country with a breakdown of the greatest suppliers of financial secrecy to its jurisdiction. The Index highlighted the poor targeting of the OECD and EU tax haven blacklists, that latter of which was found to block just 1 per cent of financial secrecy services threatening EU economies.
While the EU seems to fall back into old colonial patterns by putting the full weight of its might behind its blacklisting exercise to demand African countries, among others, to participate in the OECD’s inclusive framework and the implementation of BEPS minimum standards, even for countries which never had a say in their crafting, the Bilateral Financial Secrecy Index points to the largest suppliers of financial secrecy to the EU. And while the OECD bends over backwards in its futile attempt to appear objective and fair in their peer review evaluations while preventing the US from being blacklisted for their tax haven strategies, the Index demonstrates how the USA and the other top contributors to global financial secrecy are apt at delaying or dodging implementation of automatic exchange of tax information agreements. The tool allows the EU and others to draw concrete policy recommendations for addressing the secrecy risks for illicit financial flows.
Work underway for the launch of the Corporate Tax Haven Index
The coming year will see the release of the Tax Justice Network’s first Corporate Tax Haven Index. It will complement the Financial Secrecy Index, focusing on corporate income tax rules and practices, and likely cover 64 jurisdictions. We’re aim to establish an alternative analytical framework and narrative that challenges the OECD and EU’s outlook that “tax competition” can be a good thing and that the OECD’s BEPS and transfer pricing guidelines are the only game in town.
Race to the bottom
The Spider’s Web documentary was viewed over a million times online
After the release of Michael Oswald’s documentary The Spider’s Web in November 2017, over thirty screenings and Q&A panels were organised in 2018 with Tax Justice Network support. The screenings were attended by over 2,500 people who had the opportunity to discuss the film with Tax Justice Network Director John Christensen after the screenings. Tax Justice Network arranged for the film to be translated into French by Michèle Christensen, who also provided the French language voiceover. The French version of the film was released in a series of public screenings in west France in late-November.
The Spider’s Web was made available to watch for free on YouTube in mid-September 2018. It has since been viewed well over one million times.
Filming for The Spider’s Web follow up documentary completed
Work on the follow-on film to The Spider’s Web started in June 2017. The film picks up on many of the themes explored in The Finance Curse book, including financialisation, the political dynamics of the race-to-the-bottom, the threat posed to democracy by the dominance of financial capitalism, and the rise of plutocratic power. Most of the interviews for this new film, provisionally titled The Age of Monsters: How Bad Economics Breeds Bad Politics, was completed in 2018, with enormous support from Sands Film Studios in London. Editing and post-production will continue through 2019 with a release date in early 2020.
The Finance Curse book was published
Nicholas Shaxson’s new book, The Finance Curse: How Global Finance is Making us All Poorer, was published in October 2018. Building on his earlier book with John Christensen, published in 2013, Nick has elaborated a much deeper journalistic investigation into the origins and development of financialisation and the finance curse, a new economic framework for understanding how a financial centre that has grown above its useful size and role becomes predatory and harmful to the economy that hosts it. The book was launched with an accompanying Long Read article in the Guardian newspaper and a blog on the popular Open Democracy website. Open Democracy will be working with the Tax Justice Network to publish a 24-month blog series on the finance curse edited by Dan Hind.
Reviews of Nick’s book have been overwhelmingly positive. We were exceptionally pleased when The Finance Curse was selected by the Financial Times’ columnist Martin Wolf for inclusion in his list of best economics books for 2018.
Communications and media
Our tax justice podcasts reached over a million listeners
Our Arabic language podcast on tax justice, الجباية ببساطة (“Taxes Simply”), launched this year. Hosted by Tunisian journalist Walid Ben Rhouma, the podcast reached over 150,000 listeners in its first year. The Tax Justice Network also secured funding this year to launch a French language and Portuguese language podcast in 2019. The English language “Taxcast” podcast and Spanish language “Justicia IMpositiva” podcast reached over 1 million listeners this year.
Over 1,300 hits in media and press
The Tax Justice Network was featured in over 1,300 media and press articles from across the world in 2018. While the majority of stories came from the UK and US, our coverage was spread over more than 60 countries. Over 250,000 sessions occurred on the Tax Justice Network website in 2018 and our social media posts on Twitter and Facebook had a combined reach over 3,600,000.
As the year draws to a close, it’s worth taking a moment to achieve the progress made in 2018. And while a lot of work still lies ahead, we at The Tax Justice Network are very excited about taking the momentum for tax justice to new heights in the year to come.
 Included in the Outcome document are the following paragraphs on IFFs (illicit financial flows) and the mobilisation of resources through progressive tax systems:
“The Commission reaffirms the importance of significantly increased investments to close resource gaps for achieving gender equality and the empowerment of all women and girls, including rural women and girls, through, inter alia, the mobilization of financial resources from all sources, including domestic and international resource mobilization and allocation, the full implementation ofofficial development assistance commitments and combating illicit financial flows, so as to build on progress achieved and strengthen international cooperation, including North-South, South-South and triangular cooperation, bearing in mind that South-South cooperation is not a substitute for, but rather a complement to, North-South cooperation.”
ODA and South-South cooperation
“Take steps to significantly increase investment to close resource gaps, including through the mobilization of financial resources from all sources, including public, private, domestic and international resource mobilization and allocation, including by enhancing revenue administration through modernized, progressive tax systems, improved tax policy, more efficient tax collection, and increased priority on gender equality and the empowerment of women in official development assistance to build on progress achieved, and ensure that official development assistance is used effectively to accelerate the achievement of of gender equality and the empowerment of rural women and girls.”
Beneficial ownership verification: exploring Belgium’s sophisticated system
Some things never change: the use of Swiss banks by crooks
New study and tool for assessing risks of illicit financial flows in Latin America
Vulnerability and exposure to illicit financial flows risk in Latin America
28 January 2021