A year on from the Paradise Papers, the world has not made sufficient progress to tackle the secrecy that facilitates the hiding of wealth in tax havens. With 10% of global GDP estimated to be hidden in tax havens, and inequality rising both in developed and developing countries, the lack of progress is worrying, according to the Independent Commission for the Reform of International Corporate Taxation (ICRICT).
The failure to force all tax havens to establish public registers of beneficial ownership of companies, trusts and foundations, allows the tax haven industry to keep on flourishing.
Efforts by the EU to create a tax haven list has been mired by its own secrecy process in the way jurisdictions have been judged and the decision not to assess EU tax havens, something we hope will change soon.
The call to end corporate tax secrecy for multinationals by ensuring all multinational companies make country by country data publicly available remains unanswered.
The failure of the US to sign up to the OECD Common Reporting Standard and fully provide equivalent levels of reciprocal automatic information.
Current reforms have barely scratched the surface of the issue and the public are growing tired of weak reforms and partial answers. If countries with real political clout on the world stage continue to focus only on jurisdictions that are smaller in size, while ignoring obvious jurisdictions that ought to be part of the conversation, the result will be continued failure.
If multilateral institutions like the UN, EU and OECD are serious about tackling this problem, then it is time to discuss and coordinate a move towards the proposals supported by ICRICT such as taxing multinationals on a global basis, publishing country by country reporting data and setting a minimum global corporate tax rate. Multinationals are groups of entities that are under single management control and have a single set of owners, and should therefore be taxed as unitary firms. You can read more about our proposal in our latest report.
ICRICT COMMISSIONERS VIDEOS
Watch - and publish if you wish - this video of Gabriel Zucman, a professor of economics at the University of Berkeley, California, and an ICRICT member, on how to end tax havens.
Also look at the declaration of Joseph E. Sitglitz, Professor at Columbia University, the winner of the 2001 Nobel Memorial Prize in Economics and member of ICRICT on tax competition.
- Tax havens are a disaster for the preservation of the environment, as Eva Joly, a member of the European Parliament and ICRICT member reminds us in this video.
- Jayati Ghosh, Professor of Economics at Jawaharlal Nehru University, New Delhi, explains why fair tax is crucial for development in this video.