FOR IMMEDIATE RELEASE
November 6, 2017
Time for the UN to act to end tax abuse and financial secrecy
Thanks to the Paradise Papers leak, the world has another chance to scrutinise and pass judgment on the complex web of schemes and networks many ordinary people find offensive and unfair, noted the Independent Commission for the Reform of International Corporate Taxation (ICRICT). ICRICT is a group of leaders from both developing and developed nations which promotes international corporate tax reform from the perspective of global public interest.
It is time for the world to act and ICRICT calls on the UN to convene a global summit to end tax abuse and financial secrecy, by agreeing concrete and binding targets, with accountability frameworks to monitor progress.
The existence of tax havens does not add to overall global wealth or well-being; they serve no useful economic purpose. Whilst these jurisdictions undoubtedly benefit some rich individuals and multinational corporations, this benefit is at the expense of others, and they therefore serve to increase inequality.
Massive tax avoidance by high net worth individuals and enterprises not only penalises ordinary taxpayers, public finances and social spending, but also threatens good governance, macroeconomic stability and social cohesion.
Through regulation, company registers, tax law and supervision, governments play an important role in the existence of tax havens and offshore financial centres. These centres can only exist through governments that create the necessary conditions and offshore structures offering preferential regimes; and through the role of enablers and intermediaries such as banks, accounting firms, tax advisers, wealth managers and lawyers.
The Paradise leaks confirm that this is not a marginal activity, but a systemic, global issue. Latest estimates show that c10% of world GDP is held in tax havens globally. This global shadow financial system bleeds the world’s poorest economies and propels crime, corruption, and tax evasion. Financial secrecy jurisdictions therefore represent a significant threat to the progressive realisation of human rights and the promises of the UN SDGs (Sustainable Development Goals).
“The empirical evidence is crystal clear: nations continue to bleed massively through illicit financial flows. The ‘Paradise Papers’ only shine light on the faces of the elites and multinationals behind this phenomenon, unmasking how they channel their wealth through tax havens and secrecy jurisdictions. The implications for development policy are also clear: a paradigm shift is long overdue, from emphasis on merely scaling up development assistance to clamping down on tax evasion by the politico-economic elites and multinational corporations” says Leonce Ndikumana, ICRICT Commissioner and Professor of Economics at the University of Massachusetts.
“States must reject the artifice that a corporation’s subsidiaries and branches are separate entities entitled to separate treatment under tax law, and instead recognize that multinational corporations act as single firms conducting business activities across international borders. If it were the case, there would be no need from the multinational corporations to seek tax havens, inside the European Union or outside”, says Eva Joly, ICRICT Commissioner and member of the European Parliament.
- Click hereto access the full public content for the Paradise Papers investigation.
- Click here to access ICRICT declaration.
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Quest means business, CNN, October 8, 2015