Tackling Tax HavensThe Campaign for Tax Justice

Tax is often in the headlines

How does it make you feel?

ANGRY? “I’d like to do something but feel powerless”

CONFUSED?“Tax and finance and all the jargon just puts me off”

Isn’t the government doing something?

http://thinkprogress.org/wp-content/uploads/2012/04/nomorebailouts.jpg

“…old tax havens have no place in this new world. We now call on all countries to

apply international standards."

2009 NOW

But... YOU can do something!!

Bu

What does tax do for us? What does tax do for

business?

Tax Justice campaigners believe that progressive tax regimes:

• Fund key infrastructure, public services and development• Reduce inequality• Change behavior• Strengthen

democracy and governance

How it is now…

So what are tax havens?• Places “that seek to attract business by offering

politically stable facilities to help people or entities get around the rules, laws and regulations of jurisdictions elsewhere.” Nicholas Shaxson Treasure Islands p8 • Secrecy jurisdictions• Offshore but not

all islands• Eg. City of London

and Delaware in the U.S.

The rise of global finance and the offshore system

Usually small with a legislature that is non-democratic

or easily dominated by financial

interests

Strict banking

secrecy – in Cayman it’s illegal just

to ask!

Lax regulation –

shell companies/ trusts can be set up without knowing who the

owners are

Low or zero tax regimes

Tax havens

As a SYSTEM: Hiding at least $21 trillion • Tax havens are hiding c.

£13 trillion ($21 trillion) on behalf of criminals, dictators, wealthy individuals and multinationals (including 98% of FTSE 100 companies).

• The money offshore is big enough to stack to the moon... and back again... and carry on!

The problems: Corporations

• 60% of world trade is between subsidiaries WITHIN corporations – supported by the global tax avoidance industry – (lawyers, accountants and other services)

• They use techniques of transfer mispricing or re-invoicing during intra-group cross-border sales

• 52 of 100 largest economies in world are corporations

Vodafone vs. the cuts

In 2010, HMRC let Vodafone off paying a staggering £6 billion in tax. Amazingly, in 2011, it paid no corporation tax on profits exceeding £402 million. There needn’t be ANY cuts to the disability living allowance.

My son is profoundly disabled and lives in a fantastic nursing home, without his

Disability Living Allowance mobility funding he will be unable to go anywhere. Unless I

work the rest of my life his care will have to suffer. It’s an unfair cut that will save little

money, but have a profound effect on those in residential care.

Story taken from False Economy

Marta’s Story: SAB Miller

In the last two years Marta, who works 12 hours a day selling beer in her shop, has paid more income tax than the giant multinational drinks firm next door has paid in Ghana.

“I don’t believe it. We small businesses are suffering from the authorities. If we don’t pay, they come [to lock our stalls] with a padlock”

Adapted from www.actionaid.org.uk

Individuals • UK Non domicile rule allows rich to escape taxes• 2006 investigation – 54 billionaires in the UK

Collective fortunes: £126bn, Paid tax: £14.7m• £4.9m paid by 53 of them was 714 times too little• That would take the tax bill of a teacher on £40k

from £6505 to £9

Financial crisis

Corruption and capital flight

• Tax havens facilitate bribes, money-laundering, etc.• Illegal capital flight:

tax havens cost the lives of at least 250,000 children a year in the developing world.

The tally: UKTotal cost to the UK:Tax avoidanceTax EvasionUncollected taxTOTAL

HMR&C estimateBenefit fraud(Philip Green

UK tax receipts 2011/12: £548bn

UK budget deficit 2012: £127bn

£25bn£70bn£28bn

£123bn£45bn£1.5bn

£285mn)

The tally: Developing countries Christian Aid estimates that at least $160bn is lost to

developing countries in corporate tax avoidance alone. That would:

• Pay to reach the UN millennium development goals several times over.• Save the lives of 350,000 children under five

every year.• Be almost twice the amount poor countries

receive in aid.

Who owes who?

“Tax is the most important, the most beneficial, and the most

sustainable source of finance for development.”

(Tax Justice Network)

Solutions: policy1

2

35

4

The BattleJust the

beginning...

Joining the dots: Tax havens

DEVELOPMENT

GLOBAL FINANCIAL

CRISIS

NEOLIBERALISM THE MARKET

VS. GOVERNMENTS

INEQUALITY DEMOCRACY

CLIMATE CHANGE

MORAL RESPONSIBILITY

PUBLIC VERSUS PRIVATE

Tax Justice needs YOU!

Recent success stories: What can you do:

Join the Campaign for Tax Justice

…and many others…

The ARGUMENTS

WHAT DO YOU THINK?

Sources

✴Nick Shaxson, Treasure Islands✴www.tackletaxhavens.com✴www.taxjustice.net✴http://www.taxresearch.org.uk/Blog/richard-murphy/✴Illustrations by Jorge Martin & Ellie Grassick✴Marta’s story, Action Aid