Global Concerns - 9 - Corporate Tax Abuse

"The antidote to corporate deceit and deception is people power : People like you exposing corporate abuse, demanding it end, and not accepting half measures for an answer." - Corporate Accountability

"Despite having a population of less than 31,000, the British Virgin Islands currently has about 417,000 active companies on its register. They hold assets around the world worth an estimated $1.5 trillion." - The International Consortium of Investigative Journalists

"We have a rigged tax code that has essentially legalized tax-dodging for large corporations and the world's wealthiest individuals ... It is time to end these egregious loopholes and make the wealthy pay their fair share." - Bernie Sanders

“Drug companies appear to be cheating governments out of tax revenues that could be invested in healthcare. They are pricing medicines out of the reach of poor people. And they are using their power and influence to torpedo any attempt to cut the cost of drugs and police their tax practices.” - Winnie Byanyima, Oxfam International’s Executive Director

“The corrupt don’t like paper trails, they like secrecy. What better way to hide corrupt activity than with a secret company or trust as a front? ... You can anonymously open bank accounts, make transfers and launder dirty money.’’ - Transparency International

"About 63 percent of U.S. multinationals’ foreign profits are held offshore ... About 10 percent of Europe’s total wealth is now offshore, along with almost one-third of Africa’s and fully half of Russia’s." - The International Consortium of Investigative Journalists

"... the offshore world was once thought to be a shadowy, but minor, part of our economic system. Now we know : It IS the economic system." - Luke Harding, Guardian newspaper reporter and a partner on both the Panama Papers and Paradise Papers exposes of global financial corruption and tax abuse

1. Almost all of the largest corporations own hundreds (and in some cases thousands) of offshore subsidiary companies in Tax Havens and low tax jurisdictions. By doing business through these they avoid paying tax to the countries in which they operate and from which they extract their massive profits.

2. The scale of the world's current economic problems is very large, but not when compared with the scale of corporate Tax avoidance. Just one example : Each year the total tax which corporates fail to pay in developing countries (from which they extract large profits) is far greater than the global amount of Aid given to all those countries by the whole of the international community.

3. So, while ordinary taxpayers around the world are paying Tax so that Aid from their own country can be used to help the poorest countries, the corporates are not paying their taxes to developing countries - or to developed countries. Instead, they are evading and avoiding Tax on a massive scale. Governments and international bodies (e.g. : the IMF, the WTO, World Bank, UN, EU, ECB, ASEAN, G7, G20, etc) are the architects of the international order that have allowed this to come about - and they are taking steps to 'free up' corporations even more. Among these steps are the introduction of massive 'trade deals' such as the Trans Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (TTIP). These all contains multiple measures which 'free' businesses from laws and regulations so that they can expand their people and planet-wrecking activities, simply in order to make more money for those who are already very wealthy.

4. One result is that problems such as poverty, poor health, high child mortality and low life expectation persist in developing countries because the infrastructure needed to remove these problems cannot be afforded by those countries.

5. Corporate tax abuse such as this is made possible by politicians and governments being willing to enact and leave unchanged Tax laws and other laws that allow it to happen. It is not an accident and it is not an unintended consequence of legislation. It is a core part of the fabric of a neoliberal economy.

6. This is a massive problem, not only in the capitalist 'west'. A report from Global Financial Integrity finds that China lost $3.79 trillion in illicit financial flows from 2000-2011. The report finds that crime, corruption, and tax evasion on a massive scale drive Chinese inequality and threaten the nation's economy.