What if there is a way to directly fund development that doesn’t involve foreign aid or philanthropy? A recent article in the Christian Science Monitor, written by the finance ministers of France, Japan, and Belgium, proposes just this. The authors suggest using innovative financing—which uses small taxes on large financial transactions, like purchases of airline tickets—to mobilize resources for development initiatives.
Just how small can these taxes be? Recently, the Taskforce on Financial Transaction for Development reported that a levy of 5 cents on every $1,000 traded on the foreign exchange market could bring in more than $30 billion per year. The ministers hope these figures show international organizations, like the United Nations, could use innovative financing alongside traditional foreign aid to fund safe drinking water, food, treatment for pandemics, and education for children.
I admire the courage it must take to propose such funding techniques in an environment when even maintaining existing tax rates elicits heated reactions. But if we examine the economics behind this proposal, I think we’ll find it satisfies economic guidelines.
Continue Reading »
Our friends at Revenue Watch have just finished translating the Publish What You Pay / Country-by-Country Reporting provisions of the Dodd-Frank Wall Street Reform legislation into Arabic, Chinese, French, Russian and Spanish. Section 1504 of the recent Dodd-Frank Act requires country-by-country and project-by-project reporting by all extractive companies listed on the SEC.
Read / download (PDF) the translations below:
`Indian black money at $1.4 trln’
United News of India, September, 1, 2010
No assistance in stolen bank data cases
Swissinfo.ch, September 1, 2010
UBS On Track To Fulfill Orders To Exit US Offshore Operations
Automated Trader (Dow Jones), September 1, 2010
Fraud fears lead to run on Kabul Bank
Financial Times, September 2, 2010
Karzai’s brother calls for U.S. to shore up Kabul Bank as withdrawals accelerate
The Washington Post, September 2, 2010
US Def Sec: Afghans should lead corruption fight
Associated Press, September 2, 2010
Banks not paying price of role in drug trade
My San Antonio News, September 2, 2010
French minister admits role in L’Oreal heiress saga
Reuters, September 2, 2010
Photo by Andy Radcliffe / CC BY-SA 2.0
The Isle of Man Today web site carries the following back handed compliment today, the following being an edited (shortened) version of the story:
We have also written a story about a letter from a group who thinks the Isle of Man should ditch zero-10 company tax.
The group of 12 people – including a high profile charity worker – says that we’d be better off in the long run and have a better reputation if we re-introduced company taxes.
You might remember that a few weeks ago (August 10, to be precise) we ran a story based on a survey of corporate service providers and other finance sector interests. They predicted doom and gloom – ultimately lots of job losses and a big cut in tax take – if the Island lost zero-10.
Small global taxes would make a big difference for world’s ‘bottom billion’
The Christian Science Monitor, August 31, 2010
Indonesian MPs named in central bank bribery case
Reuters, September 1, 2010
Out of the Spotlight, Indonesian Corruption Watch Case Stalls
Jakarta Globe, September 1, 2010
Corruption probe ruffles US-Afghan relations
Associated Press, August 31, 2010
Afghan central bank insists Kabul Bank is sound
Associated Press, September 1, 2010
Bettencourt home raided by French police in Sarkozy scandal
Daily Telegraph, September 1, 2010
Paul Hogan vows to fight Australian tax office
Reuters, September 1, 2010
Russian mafia taking over French Riviera
The Daily Telegraph, August 31, 2010
As I have noted, there is a popular argument among advocates of tax havens that these jurisdictions provide a positive influence on the world through so-called “tax competition.” Mostly these proponents toss the phrase into their arguments with the misguided hope that those hearing it will not think too hard about it, because at the end of the day, it doesn’t make much sense.
As far as I can tell, the most comprehensive definition of tax competition was put forward by Richard Teather, a tax specialist from the UK, in “The Benefits of Tax Competition.” Teather defines tax competition as “deliberate reductions in effective tax rates” to “attract foreign capital investment.” Teather argues European governments, fearful that tax havens would suck them “into a spiral of competitive tax reductions that would result in investment income being tax free,” have responded by “seeking either to force [tax havens] to raise taxes or to emasculate their tax-efficient status.”
I actually don’t have a problem with this argument. Foreign direct investment—that is when a citizen of one country makes a capital investment into a company in another—occurs through legal, generally transparent channels. In this case, a county’s tax-rate is an expense to the investor, just as brokers’ fees and labor are costs, too.
Continue Reading »
The Bryggen quarter in Bergen, Norway | Photo: techectomizer, Picasa
In just four short weeks the Task Force will host its second annual conference, and we want you to be there! Titled Achieving Transparency: A Dialogue for Action, the 2010 annual conference of the Task Force on Financial Integrity and Economic Development will take place at the Radisson Blu Hotel Norge in beautiful Bergen, Norway from September 28-29, 2010.
The current financial crisis evidences the same lack of transparency in the global financial system that has affected developing countries for decades. Concrete, practical means exist for enhancing transparency to the benefit of rich and poor nations alike.
Speakers and panelists will address the Task Force’s five recommendation areas for achieving financial transparency: country-by-country reporting, knowledge of beneficial ownership, automatic exchange of tax information, curtailment of trade mispricing, and harmonization of predicate offenses among FATF countries. Breakout sessions will focus on upcoming projects and specific areas of concern within illicit financial flows, including a new financial integrity index, corruption, Millennium Development Goals, the G20 process, Africa’s concerns about illicit outflows, and more. Together, speakers and participants will contribute ideas for an action agenda aimed at achieving transparency, a plan that will guide the Task Force’s further programs! Continue Reading »
Christian Aid is launching a new phase of its Trace the Tax campaign for greater financial transparency by multinational companies.
The charity is asking supporters to help persuade four firms to back its call for accounting reforms which will help poor countries collect more of the tax billions which are rightfully theirs.
All four have assets and subsidiaries in developing countries. They are: Vodafone, Unilever, TUI Travel (which owns Thomson and First Choice) and Intercontinental Hotels Group (which owns Holiday Inn).
Helen Collinson, Campaigns Manager at Christian Aid said: ‘We are appealing to these companies to support our campaign for greater tax transparency, including the call for a new accounting standard to ensure companies report on their profits made and taxes paid in every country where they operate. It is really important to stress that we are not accusing these companies of tax dodging. Continue Reading »
Mexico fires thousands of police to combat corruption
Reuters, August 30, 2010
Mexico massacre: How the drug war is pushing cartels into human trafficking
The Christian Science Monitor, August 30, 2010
Analysis: India can now follow the black money
Reuters, August 31, 2010
Attack on China whistleblower shows risk of unveiling corruption, fraud
The Christian Science Monitor, August 30, 2010
French PM Fillon: Labor Minister Woerth Is “Innocent”
Dow Jones, August 30, 2010
Obama Widens North Korea Sanctions on Nuclear Funding
Bloomberg News, August 30, 2010
Russian police turn to crime
AFP, August 31, 2010
Niger ex-finance minister charged with graft
AFP, August 31, 2010
Photo by Spc. Laura Owen, U.S. Army | Photo Courtesy of U.S. Army
When you first hear about it, the trafficking of human organs sounds like a gruesome black-market practice, carried out by the shadowy characters of the global criminal underworld. And you wouldn’t be entirely wrong. Just Google “organ trafficking” and you’ll see hundreds of pictures of people holding up their shirts to reveal long scars from where their kidneys have been removed. None of the people photographed look like your college roommate or the captain of the tennis team. None of them are reclined in a plush Manhattan parlor or smiling as they climb into the back of a town car. They’re usually sitting on the dirty city streets of developing countries or lying on hospital cots looking undernourished and desperate. Add to this image the unconfirmed reports of people being kidnapped for the express purpose of organ removal and the whole business just seems disgusting and hellish.
But what if your son WAS the captain of the tennis team? And what if you were told that without a kidney transplant he only had a few months left to live? And—by the way—he’ll join thousands of people on a waiting list (Good luck!). OR … for $100,000 someone offers to get you a kidney and perform the surgery and the whole thing can be taken care of in two weeks. Not only that: the donor is an Egyptian man who has come upon hard times and is eager to make $5,000 so he can provide for his family.
Continue Reading »
Tax havens protecting Hawala operators, says global task force
The Economic Times, August 29, 2010
COLUMN: Money trail links the war on terrorism to the global financial crisis
Sydney Morning Herald, August 30, 2010
French prosecutor seeks Woerth case evidence
Reuters, August 29, 2010
Tax pact to crack Swiss banks
Hindustan Times, August 30, 2010
Graft-Fighting Prosecutor Fired in Afghanistan
The New York Times, August 29, 2010
South Korea’s Lee Suffers Latest Blow as Premier-Nominee Quits
Bloomberg News, August 30, 2010
Russian officials blacklisted after tax fraud investigation
The Daily Telegraph, August 30, 2010
Collapsed Chilean mine ‘reopened after bribes’, despite fatal accidents
The Times of London, August 30, 2010
Photo: Urbanrenewal, Wikipedia (En)
The Swiss government has announced that it has examined the dossiers of over four thousand UBS clients suspected of committing tax evasion offences in the United States, but they have only transmitted their findings to the US authorities for around half of the examined cases.
Under the terms of the administrative agreement agreed between Switzerland and the US in August 2009, criteria were established for proceeding with an administrative assistance request submitted by the Internal Revenue Service. This included a requirement that the Swiss Federal Tax Authority examines 4,450 UBS client dossiers and issue decisions in respect of releasing each dossier before the agreed deadline of 26th August 2010.
Procedural delays arising from a court decision in January 2010, which concluded that the agreement between the Swiss and US authorities was illegal, hampered the FTA’s process, and in an attempt to head of the threat of a John Doe summons brought against UBS the Swiss government are now aiming to finalise the outstanding decisions before the year end.
Continue Reading »
Swiss halfway done giving UBS account info to US
Associated Press, August 26, 2010
I.R.S. to Drop Suit Against UBS Over Tax Havens
The New York Times, August 27, 2010
Mexico targets money laundering with plan to limit cash transactions
The Washington Post, August 26, 2010
Tax lawyers gave Hogan ‘all clear’ for offshore fund
The Australian, August 28, 2010
Revenue expects to collect €40m in offshore inquiries
The Irish Times, August 27, 2010
Afghanistan Contractor’s Former Employee Pleads Guilty to Taking Bribes
Bloomberg News, August 26, 2010
CIA making secret payments to members of Karzai administration
The Washington Post, August 27, 2010
Guatemala’s Former Top Cop Going to Jail for Corruption
Latin American Herald Tribune, August 27, 2010
The Wyly Brothers (spelled w-y-l-y, though it might as well be spelled w-i-l-y), have broken their long silence.
A few weeks ago, I wrote about the recent suit brought against Samuel and Charles Wyly by the Securities and Exchange Commission. The SEC believes the brothers have reaped $550 million in undisclosed gains, and hid the money in a series of channels through the Isle of Man and the Cayman Islands, two of the world’s most infamous tax havens.
I theorized these men had a bad case of the egos. This is an especially dangerous trait when it’s coupled with a little intelligence and a lot of money.
Continue Reading »
The FT reports:
The US Treasury is close to issuing rules to force banks worldwide to hand over up to 5m Americans’ account details in an assault on tax evasion that financial institutions say is unworkable.
Tens of thousands of banks, fund managers, insurers and hedge funds face having to give the names of US clients with at least $50,000 of assets to the Internal Revenue Service under the Foreign Account Tax Compliance Act, passed in March.
Institutions are stepping up lobbying ahead of guidance from the US Treasury on implementation of the law. They argue that the legislation will cost them billions of dollars in compliance costs and expose them to the risk of flouting domestic laws on data protection. Many countries do not allow bank details to be given to a foreign state.
An official said the department was in the “final stages” of preparing guidance. “Addressing offshore tax evasion helps level the playing field and create a fairer system for all taxpayers,” the official said.
What if there is a way to directly fund development that doesn’t involve foreign aid ...
September 3, 2010
Our friends at Revenue Watch have just finished translating the Publish What You Pay ...
September 2, 2010
It is no secret that black money has been flowing out of India into Swiss ...
September 2, 2010
Richard Murphy has pointed out this must-see video which shares one of the ...
July 28, 2009 | 25 Comment(s)
Any worthwhile point of view will always be met with opposition. The stance against ...
August 28, 2009 | 12 Comment(s)
FT.com / Entrepreneurship - Tax crackdown defended. A leading adviser on ...
September 29, 2009 | 8 Comment(s)
I once heard that “Finance is the art of passing money from hand to hand ...
June 25, 2009 | 5 Comment(s)
A few weeks ago, I wrote a blog recapping some of the ways companies ...
August 12, 2009 | 5 Comment(s)
Subscribe to the Task Force Blog RSS feed and get the latest blog posts!
The Task Force on Financial Integrity & Economic Development
1319 18th Street, NW Suite 200 Washington, DC 20036
Email: info@financialtaskforce.org
Telephone: +1 (202) 293-0740 Fax: +1 (202) 293-1720
