The FACTI panel, a panel of former heads of state and government, past central bank governors, business and civil society leaders and prominent academics, has published an interim report this morning on tax abuse, money laundering and corruption plaguing global finance.
The High-Level Panel on International Financial Accountability, Transparency and Integrity for Achieving the 2030 Agenda (FACTI Panel), established by the 74th President of the UN General Assembly and the 75th President of the UN Economic and Social Council, says governments must do more to tackle tax abuse and corruption in global finance.
The report states governments can’t agree on the problem or the solution, while resources that could help the world’s poor are being drained by tax abuse, corruption and financial crime. Estimates in the report include:
- $500 billion losses to governments each year from profit-shifting enterprises;
- $7 trillion in private wealth hidden in haven countries, with 10% of world GDP held offshore;
- Money laundering of around $1.6 trillion per year, or 2.7% of global GDP.
Commenting on the interim report, Alex Cobham, chief executive at the Tax Justice Network, said:
“Today’s report published on the heels of yet another trillion dollar finance scandal makes one thing clear: our global tax system isn’t broken, it’s programmed to fail. For decades, corporate giants and billionaires have pushed our governments to programme the global tax system to exempt those at the very top from the rule of law and to fail the needs of everybody else. The pandemic has exposed just how grave a cost that failure bears.
“Now more than ever we must reprogramme our global tax system to prioritise people’s wellbeing over the desires of those bent on abusing tax. The FACTI panel has laid out a clear path for achieving this, identifying the crucial point: ‘There is no international tax convention to compare with the United Nations Convention against Corruption and United Nations Convention against Transnational Organized Crime, which have nearly universal coverage.’ No country can reprogramme a global tax system on its own. The FACTI panel confirms that the OECD has proved incapable of delivering genuinely inclusive outcomes: we need a UN tax convention to make sure our global tax system works for everyone.
“The detailed report identifies large financial costs and human impacts, including on the inequalities facing women, of the central failures that the Tax Justice Network has long fought against: the continuing acceptance of anonymous ownership of companies, trusts, foundations, and financial assets including bank accounts; the continuing impunity of professional enablers of corruption and tax abuse, including major law and accounting firms; and the absence of consistent public statistics, at both national and global levels, on the offshore ownership of assets, and on the profit shifting of multinational companies.
“We look forward with anticipation to the FACTI panel’s final report in February 2021, which will set out specific recommendations to address these failures after consultation with governments from all around the world. Major financial centres such as the UK and USA are expected to seek to undermine progress in the meantime – but progressive states must insist on the urgent need for the UN to lead in tackling these issues globally. Relying on the rich country members’ club, the OECD, would be to repeat a mistake while expecting a different outcome.”
Contact the press team: [email protected] or +44 (0)7562 403078
About the FACTI panel: https://www.factipanel.org/about