Tuesday, March 08, 2011

Links Mar 8

India: Baba Ramdev Elaborates on Huge Conspiracies in Delhi Rally Indo American News
Mar 6 - Yoga guru launches his campaign against black money. "Our economy has a huge amount of black money. Rs. 300 lakh crore being stashed away in tax havens and Rs.100 lakh crore being in internal circulation. ... This is a massive amount which means that every family in this country would get Rs. 2.5 lakh. Each jila can get Rs. 50,000-60,000 crore for development. Each village would get Rs. 100 crore. It could take our country ahead of many developed nations overnight."

Pakistan: Action planned against 700,000 tax evaders Dawn.com

Mar 8 - The government is to launch a crackdown. Data about people who owned luxury cars and big houses but never paid any tax had been collected with the help of the National Database and Registration Authority. It's becoming harder to hide. Reminder of Clinton: Pakistan should tax its elite

Use Africa's stolen billions to stem the need for aid Mail&Guardian

Mar 7 - "Money spirited out of Africa is easy to hide in an array of eager tax havens. Although the damaging consequences of tax havens are fairly obvious (and relate to international crime and terrorism as well as to development concerns), I have yet to hear a single serious reason for their existence."

Denis Robert: "What they have done is too ... disgusting" Nouvelobs.com
Mar 17 - Journalist Denis Robert exposed a
secret system of hidden accounts within Clearstream, the Luxembourg- based securities clearing house. Clearstream's core business is settlement and safekeeping/custody - back-office operations" - for Eurobonds. Clearstream’s customers comprise approximately 2,500 financial institutions in over 110 countries. "With almost €11 trillion in assets under custody [Clearstream] is one of the world’s largest settlement and custody firms for domestic and international securities." Denis Robert has finally been vindicated after 60 trials and 10 years of legal harassment, and his books are being re-issued. (For more on Eurobonds: see here.)

And for more on back-office operations:
Tough questions to be asked on U.S. Foreign Account Tax Compliance Act (FATCA) says expert Cayman News Service
Mar 7 -
FATCA (see our memo on it here) comes into effect in 2013, but even now offshore banking jurisdictions face tough questions on handling US accounts and wire transfers. All wire transfers around the world using US currency must pass through a US bank regardless of the starting country or final destination -- this is standard in international banking back-office operations. Once the wire passes through the American bank, the US Internal Revenue Service therefore effectively has control on how that transfer will be treated for tax purposes. If the US receives a large increase in tax revenue following the enforcement of the FATCA then other jurisdictions, including the EU, may follow suit.

The Office for Tax Simplification decided to keep the UK as as tax haven Progressive Tax Blog
Mar 7 - The Prog Tax Blog comments on Eurobonds as a financial instrument. And Yesterday we linked to UK encourages tax avoidance via Eurobonds Treasure Islands - read the book for a Eurobonds
exposé. Also see
Tax Research UK picking up this story.

U.S. Sanctions uncover billions of dollars Financial Times
Mar 7 - The sanctions, imposed by President Barack Obama just over a week ago, are so wide-ranging that they caught assets US banks were merely looking after on behalf of overseas banks in an arrangement called sub-custody. Read this. It's significant. Again, as per the Cayman link above - standard back-office operations are coming into play in the deterrence of illicit asset flows and custody.

Expanded Daily Activity Chart Canada Revenue Agency

Fun, but it makes the point. We all rely on taxpayer funded services. A reality check. See some commentary by people who get that - Canadians for tax fairness. Also check out our friends at Wealth for the Common Good.

Tower Hamlets protesters vent fury over tax at Barclays headquarters The Guardian

Mar 7 -
More people who get it, take action inspired by UKUncut. One of the poorest boroughs in Britain, Tower Hamlets has the UK's highest proportion of children living in poverty. The council plans £70m in budget cuts over the next three years, hitting youth services, home care, school support and mental health support. Just hours before the protest, Barclays had announced that its chief executive, Bob Diamond, had been awarded a £6.5m bonus, while two other high-flyers had received over £10m each.

Betfair plans to move offshore Financial Times
Mar 8 - Betfair? A UK gambling exchange recently floated, in October 2010, will in future operate under a Gibraltar rather than a UK gaming licence, following the lead of other betting operators that have moved offshore to escape the UK’s 15 per cent tax on gross betting profits. It is expected to dodge about £18.5m in annual tax payments as a result of the move. Betting on a race to the bottom. Odds against tax dodging, for the long term, we trust.

1,000 Tax Haven Subsidiaries, and We're Still Counting End Tax Haven Secrecy
Mar 7 - ActionAid’s complaint against almost half of the FTSE100 for failing their legal duty to disclose a full list of their subsidiary companies is continuing to bear fruit.

A lucrative business in washing reputations Financial Times
Mar 8 -
London has long been a thriving centre for the washing of foreign riches and reputations – a place for autocrats and oligarchs to deposit their cash and scrub up their images. As long, of course, as they can afford the sizeable fees. More on the Treasure Islands site.

Interview with Nick Shaxson 38 degrees People.Power.Change

Mar 3 - As Nick points out, the UK tax gap alone, in outright tax evasion, and tax avoidance – is estimated at 40 billion pounds per year by HMRC; and at 120 billion per year by Richard Murphy who has done a lot of pioneering work on this. Follow Nicholas Shaxson on twitter at: http://twitter.com/nickshaxson


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