In August 2009, France and Switzerland amended their tax treaty. The new treaty stated that the two countries would from now on exchange upon request all information necessary for tax enforcement, including bank information otherwise protected by Swiss bank secrecy laws. In the following months, one of France’s richest persons and her wealth manager were taped discussing what to do with two undeclared Swiss bank accounts, worth $160 millions. After a visit to Switzerland, the wealth manager concluded that keeping the funds in Swiss banks or bringing them back to France would be too risky. He suggested that the funds be transferred to Hong-Kong, Singapore, or Uruguay, three tax havens which had not committed to exchange information with France. After the tapes were made public, they were widely commented in French newspapers and eventually the funds were repatriated to France.
Looking at 2012, experts from the Brookings Africa Growth Initiative (AGI) and colleagues from think tanks based in the region have come together to produce this year’s issue of Foresight Africa, where they outline the top priorities for the continent for 2012 and beyond. AGI scholars assess what they see as the major challenges for Africa in the coming year and provide policy recommendations on how to manage these challenges and leverage opportunities to catalyze and reignite growth in 2012. Similarly, AGI and its partner think tanks identify country-specific challenges in Nigeria, South Africa, Senegal and Kenya.
In a study conducted between November 2010 and February 2011 on ill-gotten money and the economy, the Financial Integrity team looked at the experiences of Malawi and Namibia. We approached the project with an open mind and without any assumptions, finding that for Malawi, corruption and tax evasion as a percentage of GDP represent a significant drag on economic development.
BERLIN – Corruption continues to plague too many countries around the world, according to Transparency International’s 2011 Corruption Perceptions Index released today. It shows some governments failing to protect citizens from corruption, be it abuse of public resources, bribery or secretive decision-making.
Transparency International warned that protests around the world, often fuelled by corruption and economic instability, clearly show citizens feel their leaders and public institutions are neither transparent nor accountable enough.
In this report, we first estimate the absolute size of a country’s shadow economy based on its own published estimate of its GDP and recently-reported data on the size of shadow economies published by the world bank. This, and other data we use, is what we think the best currently available for the purpose of this report and, as such, should provide the best estimates possible.
By the definition used here, economic activity in the shadow economy of a country will be tax-evading. So we next calculate an estimate of the amount of tax lost as a result of the existence of that shadow economy. We do this by looking at how much taxes are on average in the state as a share of GDP, and then apply the same tax share to the shadow economy, to reveal our estimates of lost taxes by state. We then compare these lost taxes to health care spending in each country surveyed. This data has also been compared by continent.
LONDON – The issue of tax collection is rising fast up the political and social agenda, as countries across the world make deep cuts in public spending and increase taxes in ways that hurt the poor and the middle classes the most.
This new research demonstrates how important it is to tackle tax evasion and the tax havens that help wealthy individuals and organisations escape from contributing to the services that directly benefit them – from the health and education systems that support their workforces, to the roads that ship their goods to markets, to the courts of law that enforce their contracts or to the police who protect their property.
The international community has repeatedly stressed the need to mobilise domestic resources in developing countries, as the most sustainable way of financing development and ending aid dependency. Yet, many developing countries are affected by a number of challenges that limit their capacity to collect taxes. One such challenge is multinational companies’ lack of accountability regarding their operations and more specifically regarding the taxes they pay. This report explains how the cross border nature of multinational companies’ operations combined with the absence of adequate transparency regulations have very damaging implications for a country’s ability to mobilise domestic resources. Although this is relevant for both developed and developing countries, the report focuses on the impacts for developing countries, which have weaker capacities to face this challenge.
Los días 6 y 7 de octubre de 2011, con motivo de la tercera conferencia anual del Grupo de trabajo sobre integridad financiera y desarrollo económico (en adelante, Grupo de trabajo) se reunieron en parís, Francia, representantes de la sociedad civil, gobiernos, políticos, académicos, periodistas y el sector privado.
his U4 Issue Paper looks at the potential of these initiatives to reduce illicit financial flows from extractive sectors, particularly those initiatives that target resource revenue governance. Section 2 provides a brief overview of resource governance challenges and the nature of illicit financial flows in extractive sectors, highlighting consequences for development in poor countries. Section 3 summarises international initiatives to improve resource revenue governance, focusing on information disclosure and certification. It also discusses their comparative achievements and factors for success. Section 4 sums up the potential for these initiatives and suggests priorities within them as well as the possible need for additional actions.
This report is part of an initiative to create a comprehensive, and globally representative series of country reports that touch on diverse tax justice issues. The production of this report is the collective effort of all of the organisations involved.
The Tax Justice Network promotes transparency in international finance and opposes secrecy. TJN was initiated at in 2002, and is dedicated to high-level research, analysis and advocacy in the field of tax and regulation. Tax Justice Network Africa was launched in 2007 with the aim of bringing tax issues to the foreground of the broader development agenda. We work to map, analyse and explain the role of taxation and the harmful impacts of tax evasion, tax avoidance, tax competition and tax havens.
Last week Christian Aid welcomed the G20′s bold pronouncements on tax havens, financial transparency and development. President Sarkozy went as far as to say that havens that didn’t comply would be excluded from the international community. A whole programme of work on tax and development was agreed.
Our scorecard compares the recommendations made, with what the G20 actually delivered. The scores that we attribute to the G20 simply evaluate their response to that expert opinion.
Back in September I was sitting in the salubrious office of an official from one of International Financial Institutions – when he slouched back in his chair, sighed and said ‘I can’t even bear to read those G20 communiqués – they are so vacuous.’ That evening, I found myself at a dinner hosted by DC law firm Jones Day where former Mexican President Zedillo branded the G20 ‘a disappointment.’
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