Monday, March 26, 2012

Tax justice: ripples spreading in Europe

Adapted from the Treasure Islands blog:
Last week there was an event in Brussels entitled Tax and financial havens: a threat to the EU's internal market, organised by the European Economic and Social Committee - an official advisory body to the EU institutions. In a report on the event, I am delighted to see this:

"In his opening speech at the conference on tax havens, the president of the EESC section on internal market Bryan Cassidy plainly pointed at Switzerland, Luxembourg and the UK as onshore fiscal havens within Europe. He underlined how "money laundering and tax havens are closely connected". And he praised the work of a former Reuters journalist Nicholas Shaxson, whose book on tax havens Treasure Islands is now on the desk of many decision-makers in Brussels. In his well-documented book, Shaxson argues that the UK and the United States are the biggest fiscal havens in the world.

The exotic islands and alpine resorts, usually indicated as shelters against taxmen, are mere subsidiaries of Wall Street and the City of London in carrying illicit activities, Shaxson says. Phrases such as "tax efficiency" and "transfer pricing", enabled by a vast network of double-taxation agreements, make it possible for international individuals and global corporations to reduce their tax payments to nil through both legal tax avoidance and illegal tax evasion - Shaxson explains.

Global action seems to be following on the heels of these accusations."

Well, I don't want to claim too much credit for all this global action (or, in many cases, non-action). The main impetus for action is the financial crisis which has led to fiscal deficits and a drive to re-examine old orthodoxies. I think Treasure Islands certainly came along at a good time in this respect. Various others, such as the Tax Justice Network, and closely connected others such as the Uncut movements, Richard Murphy, and various non-governmental organisations around the world, have played major parts too. The report went further:

"The most radical voices against creative finance and accounting are getting louder, and more ears are ready to listen to them. "Fiscal havens are the central feature of the globalised economy; they are the core feature of contemporary capitalism and contributed to shape the current financial crisis," said John Christensen, economic adviser to Jersey's fiscal haven between 1987 and 1998 - and later founder of the Tax Justice Network or TJN."

The forces pushing against us are truly monstrous, and we lose far more battles than we win. But we are certainly having an impact, on a shoestring budget (take a look at p4 of this document to see just how little we are working with), and we are achieving one of our core aims, which is to help the world to wake up to the offshore trap that it has fallen into.


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