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Africa/Global: Tax Justice & Inequality
AfricaFocus Bulletin
June 2, 2015 (150602)
(Reposted from sources cited below)
Editor's Note
"The prevailing international tax rules and practices, as well as
the failure of governments to cooperate on international tax
matters, continue to undermine the ability of governments in the
Global South and the North to ensure that corporations and wealthy
individuals pay their fair share of taxes. ... At the same time,
many governments themselves act in the interest of corporations,
liberally providing tax incentives and signing tax treaties that
enable huge outflows of public revenues. As a result, ordinary
people all over the world carry a disproportionately heavy burden of
raising tax revenues -- while public services lack adequate
resources to meet the needs of citizens." - World Social Forum, 2015
This AfricaFocus Bulletin contains a statement from the World Social
Forum in Tunis in March 2015, outlining the concept of "tax justice"
as central to fighting economic inequality both within and between
countries in both the Global North and Global South.
"Tax justice," in the sense of "corporations and wealthy individuals
paying their fair share of taxes," cannot of course fully "end
inequality," as the headline to this document might be taken to
imply. But there is no doubt that it is an essential component of
any progressive agenda for checking inequality and promoting basic
economic and social rights for all.
This sets a broader context for the phenomenon of "illicit financial
flows," which has rightly gained increasing prominence in debates
about African development, most recently through the release and
endorsement of the Mbeki report by the African Union in February
this year (http://www.africafocus.org/docs15/iff1502.php). If these
flows, defined by the Mbeki report and by Global Financial Integrity
as funds that are illegally earned, transferred, or used, were to be
available in Africa, and taxed for development, this would be a
massive contribution to progress for the continent.
Civil society organizations in Africa and around the world, however,
point out that an exclusive focus on these clearly illegal transfers
must be put in the broader context of other mechanisms which may be
technically legal but illicit in the sense of illegitimate and
contrary to social justice. Likewise, the borderline between "tax
evasion" (illegal) and "tax avoidance" (legal but often
illegitimate) is constantly changing as lawyers, accountants, and
politicians collaborate in changing laws and their interpretations
to the benefit of the rich and powerful.
Another AfricaFocus Bulletin released today, not distributed by
email, but available on the web at http://www.africafocus.org/docs15/tax1506b.php, includes two
additional background documents, one an overview on Financing for
Development from the Trade Union Development Cooperation Network,
and two others from Third World Network-Africa, stressing the need
to put the Mbeki report's concept of "illicit financial flows"
conceived narrowly as those explicitly violating the law into a
broader context of other mechanisms of capital flight that may be
legal but equally damaging and illegitimate.
For previous AfricaFocus Bulletins on tax justice, illicit financial
flows, and related topics, visit http://www.africafocus.org/intro-iff.php
++++++++++++++++++++++end editor's note+++++++++++++++++
Tax justice to end inequality: World Social Forum 2015 Declaration
http://www.globaltaxjustice.org/ - direct URL:
http://tinyurl.com/pmbym3a
pdf at http://www.eurodad.org/files/pdf/551bebd39bcc7.pdf
The prevailing international tax rules and practices, as well as the
failure of governments to cooperate on international tax matters,
continue to undermine the ability of governments in the Global South
and the North to ensure that corporations and wealthy individuals
pay their fair share of taxes. The recent "Luxembourg Leaks" has
confirmed that multinationals continue to dodge taxes with impunity.
This is the latest in a long list of corporate tax scandals
involving major brand names including Glencore, Google, Amazon,
Starbucks, Caterpillar, Deutsche Bank, Zara, McDonald's, Associated
British Foods and many more. Similarly, the recent 'Swiss Leaks' has
revealed that wealthy individuals hide untaxed fortunes in hidden
Swiss bank accounts.
At the same time, many governments themselves act in the interest of
corporations, liberally providing tax incentives and signing tax
treaties that enable huge outflows of public revenues. As a result,
ordinary people all over the world carry a disproportionately heavy
burden of raising tax revenues -- while public services lack
adequate resources to meet the needs of citizens. The continuing
imposition of austerity measures and the increasing debt burden
aggravate poverty and inequality within and between countries,
making the need for tax justice more urgent than ever. Meanwhile,
governments are compensating for the lack of available public
funding in various ways such as incurring more debt and by entering
into risky public-private partnerships with the very same
multinational corporations that are dodging taxation. Privatization
of vital social services, where profit principally drives service
delivery and overrides basic human needs, is rationalized by the
need to raise domestic revenues.
Instead of cooperating to solve the problems, the world's
governments continue to invent new tax incentives for multinational
corporations and wealthy individuals as part of a global race-to-the
bottom. Meanwhile, rigged global tax rules fail to protect the tax
bases of the world's poorest nations against erosion driven by
international tax dodging. These global rules, which undermine
global cooperation and ignore the interests of the poorest, continue
to be negotiated and decided in closed forums of rich nations.
Continuing the tradition of the World Social Forum, which at the WSF
in Porto Alegre in 2002 issued a "Universal Declaration on the right
to tax justice as a component part of social justice," and at the
WSF in Tunis in 2013 issued a declaration on "Tax Justice for Social
Justice," we demand the following from our governments:
International cooperation for global solutions
- Establish an inclusive and well-resourced intergovernmental body
on tax matters under the auspices of the UN, which can initiate and
lead negotiations on a new UN framework convention on international
cooperation in tax matters as a first step in the reform of
international tax rules.
Automatic information exchange and tax transparency for
multinational corporations
- Adopt a common UN standard of multilateral, automatic exchange of
tax information with the option of non-reciprocal information
exchange for countries with low capacity.
- Eliminate secrecy of beneficial ownership worldwide through public
registers of beneficial owners.
- Ensure financial transparency by implementing annual public
country-by-country reporting by multinational corporations.
- Ensure that tax administrations are well resourced.
Progressive tax policies to tackle inequality within countries
- Reduce inequality by adopting a full range of progressive taxation
measures. Tax policy design and implementation must actively seek to
reduce income and gender inequality.
- Make it the highest priority commitment to invest tax funds in the
vital human development related public services and public
infrastructure (e.g., health, education, water, housing, sanitation,
transportation), sustainable development, adequate social protection
floors and to reverse climate change.
- Provide the means for citizens to make their voices heard and hold
governments accountable on their tax policy and how revenue raised
is spent.
- Ensure fiscal policies are gender sensitive. This should include
assessing and tracking the impact of regressive taxes, such as VAT,
and the tax burden, and implementing measures to shift the burden
away from poor women and men.
- Adopt and implement a financial transactions tax.
Fair international tax rules that make multinationals pay their
share
- Ensure the review of Double Taxation Agreements to bring them
fully in line with sustainable development and financing for
development needs and agenda.
- Develop solid alternatives to the dysfunctional Arm's Length
Principle.
- Remove policies and treaties that erode the tax base of other
countries.
To promote the tax justice agenda, we commit ourselves to:
- Continue and strengthen our advocacy and campaign to influence
and increase the pressure on decision makers for tax justice. This
includes public mobilization and political advocacy to ensure our
government leaders deliver vital tax justice decisions in the UN
Financing for Development summit in Addis Ababa this July and
beyond.
- Enhance our efforts to create strong social movements locally and
globally to force governments and challenge multinationals to end
tax dodging. This includes new campaigns to make multinational
corporations pay their share of taxes. We will march this May Day
under the banner "Working people pay taxes -- corporations must pay
their share" and mobilize across civil society for global tax
justice action days, including this June 23, World Public Services
Day.
- Promote gender justice as a key element of tax justice. This
includes engaging at the national level to challenge discriminatory
tax laws and ensure that tax policies recognize the invisible and
unpaid care work of women.
- Advance tax justice as a means to deliver climate justice by
generating financing, including for adaptation and mitigation.
- Work together to transform the current economic system that
privileges corporations and the wealthy, drives inequality and hurts
our environment. Our vision entails progressive redistributive
taxation polices that fund the vital public services, end inequality
and poverty, address climate change and lead to sustainable
development.
We welcome that Global Alliance for Tax Justice, owned and driven by
major regional networks in Africa, Asia, Latin America, North
America and Europe, has invited wide civil society engagement and
pledged at this World Social Forum in Tunis 2015 to collaborate and
build global synergy for advocacy and campaigns and peoples'
mobilizations for tax justice.
Global Alliance for Tax Justice
http://www.globaltaxjustice.org/about-us/
The Global Alliance for Tax Justice is a growing movement of civil
society organisations and activists, including trade unions, united
in campaigning for greater transparency, democratic oversight and
redistribution of wealth in national and global tax systems.
We comprise the five regional networks of Africa, Latin America,
Asia-Australia, North America and Europe, which collectively
represent hundreds of organisations.
How to join:
If you or your organisation would like to get involved in the global
fight for tax justice, please contact the co-ordinators of the
movement in your region (see list below).
Our members:
Asian-Australian Tax Justice Network (hosted by Jubilee South)
http://www.apmdd.org/
Red de Justicia Fiscal de America Latina y el Caribe
http://www.justiciafiscal.org/
Tax Justice Network Africa http://www.taxjusticeafrica.net/
Tax Justice Europe (hosted by Eurodad)
http://www.eurodad.org/sites/tax
Tax Justice North America The FACT Coalition (
http://thefactcoalition.org/coalition-members-and-supporters/); Tax
Justice Network-USA (http://www.tjn-usa.org/); Canadians for Tax
Fairness (http://www.taxfairness.ca/)
Committed partners:
ActionAid International, ActionAid UK, Christian Aid, Christian Aid
UK, Education International, Oxfam GB, Oxfam International, Oxfam
Novib, Public Services International
We've joined together because:
Wealthy people, banks and multinational corporations have built a
sophisticated system of secretive international financial centres
(or tax havens) supported by armies of accountants, lawyers and
lobbyists, in order to deliberately pay less and less tax on their
profits and wealth. Yet, this elite group is entirely dependent on
publicly-funded infrastructure and institutions and publiclyeducated
workforces to make their money.
Such systemic tax avoidance (both legal and illegal) has led
ordinary people to lose out as wealth flows outwards from the public
and into the private hands of the few. This distorts economies,
undermines democracy and deprives people of the vital public
services we need to live.
Now is the time
- There's a huge need for fair tax revenues to reverse growing
inequality, to combat poverty and to invest in public services,
sustainable development and addressing climate change.
- There's a massive opportunity to make progress in reforming the
rules when we work together across borders and organisations.
- Our vision is of a world where fair and progressive tax policies
support people to: - share in local and global prosperity -
access the public services and social protections needed to fulfill
their human rights - benefit from economies that work in the
long-term interests of people and our environment
Our aims are to:
- Affirm the role and obligation of governments to implement
progressive and distributive tax policies
- Mobilise domestic resources for public services and other vital
government functions
- Strengthen state accountability and the social contract
- Reduce state dependence on aid and debt financing
- Correct the power imbalance between citizens and multinational
corporations
We do this by:
- Exposing the negative impact of tax injustices on ordinary people
and our families around the world -- from the South to the North
- Taking transformative actions and campaigning for solutions to end
tax injustices
- Building a global movement to increase awareness and solidarity
around tax justice issues
AfricaFocus Bulletin is an independent electronic publication
providing reposted commentary and analysis on African issues, with a
particular focus on U.S. and international policies. AfricaFocus
Bulletin is edited by William Minter.
AfricaFocus Bulletin can be reached at africafocus@igc.org. Please
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