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Christian Aid Releases New Video Linking Poverty and Tax Evasion in Guatemala

October 25, 2010

By Clark Gascoigne

Clark Gascoigne is the Communications Director at Global Financial Integrity in Washington, DC.

Christian has just released a new video highlighting the important link between poverty and tax evasion in Guatemala.  Check it out:

Hannah Richards, Christian Aid’s communications and information officer for Latin America and the Caribbean, recently wrote about this problem in a blog post on the Christian Aid website after witnessing the devastating effects of tax-dodging on the ground in Guatemala.

Hannah writes:

We drive through rivers where bridges have collapsed and are not rebuilt. I talk to children who won’t be able to go to secondary school because they can’t afford to travel so far.

The Guatemalan government doesn’t really have much money to spend. It should have more money coming in from tax than it does.

Tax breaks for companies, tax dodging and secrecy laws mean that it’s hard to make the most of what they’ve got.

And continues:

…there’s no doubt that if we can help change tax standards and practices internationally, it will help governments like Guatemala’s increase their income.

This year Guatemala is being hit worse than ever with storms and flooding. But even so the government warned it didn’t even have the budget to keep the National Disasters Committee open until the end of the year. These are the people who send out warnings ahead of time to communities and coordinate relief efforts.

After being in Guatemala I don’t need any more convincing of the need for a fairer global tax system, and the massive benefits it could have.

For its part, the Guatemalan government has earnestly worked to put its ship in order. They’ve worked closely with Global Financial Integrity, the Task Force on Financial Integrity and Economic Development, and others over the past year to implement common sense policies to fight the illicit flows of money (and tax revenue) out of the country. However—as Hannah points out—if we really want to assist developing countries in the fight against poverty, we still need to change tax, transparency, trade and accounting standards at the international level.

Christian Aid’s video and work on this topic is all part of their Trace the Tax campaign, which seeks to help poor countries mobilize domestic resources for development through enhanced transparency and accountability both domestically and in the international financial system.

Christian Aid and Global Financial Integrity are bothcoordinating committee members of the Task Force on Financial Integrity & Economic Development.

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Disclaimer: Unless specifically stated to be the views of the Task Force, the opinions expressed on this blog are solely the opinions of the individual blogger and are not necessarily those of the Task Force on Financial Integrity & Economic Development.

  • http://www.useful-community-development.org Nancy Thompson

    Christian Aid has an excellent point here: poverty would be lowered faster by stopping corruption and tax evasion than any other single policy applied worldwide. While I like to think that my monetary contribution toward the Millennium Development Goals is helpful, it’s also true that impoverished nations, and those where the infrastructure is lacking in connectivity and quality, need to do their part to ensure that black markets come out in the open and that leaders don’t enrich themselves at the expense of the public’s needs.

    How can we improve the climate for international community development? Surely it is by providing legitimate opportunities to earn an effort-related income and thereby reducing the temptation to earn or retain money illegitimately.

  • http://www.cauxbusiness.net/home Mosese Waqa

    Although an international accounting standardizing process that requires multinational companies to provide country specific information on their financial payments/transactions may take time to happen, what really should be encouraged and supported in the interim is the role of leading civil society in the ‘first world’ to lobby their respective governments to set in place good practices benchmarks for their private companies operating overseas. Just as we hold ‘failed’ States accountable for their non-compliance to existing international conventions, 1st world civil societies should pressure their governments to put in place laws that breeds corporate integrity and ethical standards to their operations overseas. It would be then easier to push for a global/international standard if there are already existing reputable pockets of demonstrable good practices already in existence. Here, the level of sophistication in engaging governments and the private sector in building trust and encouraging honest conversations is so important. At the end of the day for each country, it’s their collective reputation that is at stake that goes beyond obvious short term economic and political goals, and spill over into feeding social-capital deficits (eg., lack of goodwill) with their neighbours. These are the long term hurdles that further exacerbate the already difficult terrain of collaborative efforts in necessary overarching understandings like brokering effective partnerships between neighbours in the MDGs, or climate change mitigations and adaptations, etc. At the end, we are all on the same ship, although some of us are in 1st class, some in 2nd class and 3rd class, and the rest on the deck. When the ship sinks, we all sink or swim.

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