Development Finance & Tax Justice - Archive

Close relatives of China’s top leaders have held secretive offshore companies in tax havens that helped shroud the Communist Party elite’s wealth, a leaked cache of documents reveals. The confidential files include details of a real estate company co-owned by current President Xi Jinping’s brother-in-law and British Virgin Islands companies set up by former Premier Wen Jiabao’s son and also by his son-in-law.

A new report by Eurodad's Stéphanie Colin deal with the issue of concessional loans in development finance. In the context of tighter budgets in OECD-DAC countries governments are looking for methods to increase official development assitance (ODA) levels without budgetary implications. One way of doing this is reporting a larger share of loans to developing countries as ODA. Other measures in this directions are ideas to leverage development resources by 'blending' public with private funds. The report discusses the main [...]

Crime, corruption, and tax evasion drained US$946.7 billion from the developing world in 2011, up more than 13.7 percent from 2010. These findings by Washington based Think Tank Global Financial Integrity, which peg cumulative illicit financial outflows from developing countries at US$5.9 trillion between 2002 and 2011 are part of a new study. "As the world economy sputters along in the wake of the global financial crisis, the illicit underworld is thriving – siphoning more and more money from developing [...]

European leaders should use their meeting this week to agree further action against tax dodging by multinationals, CSOs urge in a new report. The report: ‘Giving with one hand and taking with the other: Europe’s role in tax-related capital flight from developing countries 2013’ reveals the state of money laundering, tax avoidance and tax evasion, and the extent of government action against them, across 13 EU Countries.

GENEVA (2 December 2013) – The United Nations Special Rapporteur on the right to food, Olivier De Schutter, today called for developing countries to be granted the freedom to use food reserves to help secure the right to food, without the threat of sanctions under current World Trade Organization (WTO) rules.

Mr. De Schutter’s call comes on the eve of a high-level WTO summit in Bali, Indonesia, (3-6 December) which will try to reach agreement on proposals on developing countries’ [...]

On November 21st the sixth meeting of the OECD Global Forum on Transparency and Exchange of Information for Tax Purposes is opened in Jakarta. On this occasion, a broad coalition of organizations, including GPF, has issued a position paper on Automatic Information Exchange (AIE) for tax purposses. If a person or entity resident in one jurisdiction owns income-generating assets in another jurisdiction, the resident's tax authorities generally need to know about that asset or income, to assess their tax liabities [...]

by Mark Herkenrath

At the St. Petersburg G20 Summit, the leading industrialized and emerging countries again came out clearly for automatic tax information exchange. They want to see it implemented by the end of 2015 at the latest. The OECD was tasked with working out a framework agreement by next February and quickly completing work on the requisite technical infrastructure.

Moreover, the G20 Heads of State promised in their final declaration also to allow developing countries access to automatic information [...]

The tax structure and the level of revenue collection, budget allocations and expenditure influence the ability of governments to fulfill their human rights obligations and tackle discrimination and structural inequalities. The UN Special Rapporteur on extreme poverty and human rights, Magdalena Sepúlveda Carmona, is preparing to submit a report concerning fiscal and tax policy, poverty and human rights. Governments have been asked to respond the questionnaire prepared by the Special Rapporteur in order to gather information on domestic fiscal and [...]

‘Blending’ is a mechanism that links a grant element, provided by official development assistance (ODA), with loans from publicly owned institutions or commercial lenders. This is not a new phenomenon. What is new is the narrative of the European Union (EU), which argues that using ODA to leverage private finance is the solution following the financial crisis. There has been an increase in development finance institutions (DFIs) and EU donors using blending mechanisms to increase support and lending to private [...]

TJN’s 2013 Financial Secrecy Index exposes yawning gap between G20 rhetoric and reality

Today the Tax Justice Network launches its 2013 Financial Secrecy Index, the biggest ever survey of global financial secrecy. This unique index combines a secrecy score with a weighting to create a ranking of the countries that most actively and aggressively promote secrecy in global finance.

This new edition of the Financial Secrecy Index shows that the United Kingdom is the most important global player in the [...]

The United Nations' Sixth High-Level Dialogue on Financing for Development (FfD) that took place in New York in early October shows a deep rift between developing and developed countries. This dialogue was mandated to look at the FfD Agenda's status of implementation and the tasks ahead. While the EU thinks it contributed at least its fair share, developing countries pointed to the major failures in implementation of aid, debt or trade commitments. The future of the FfD process remains unclear [...]

The Working Group on "Financing for sustainable development" of the socalled UN System Task Team (UNTT) has issued four background papers for the Intergovernmental Expert Committee on Sustainable Development Financing and its deliberations surrounding the post-2015 UN development agenda. Paper #1 reviews investment requirement estimates that have been published over the last decade for nine sectors; paper #2 takes stock of national, regional and international public sources for sustainable development finance; paper #3 examines the challenges in raising private sector [...]

Briones2011Prof. Leonor Magtolis-Briones from Social Watch Philippines gives three reasons why the Philippines 2014 national budget is prone to misuse. Social Watch Philippines analyses the government’s annual spending budgets and releases alternative budgets through its Alternative Budget Initiative to influence the national budgets to become more supportive in creating a sustainable environment and more equitable society for the Philippines. The following is an edited version of a piece originally entitled Speaking for Myself: The 2014 National Budget, Special Purpose Funds [...]

In a feature South-African organization L4BB deals with the subject of growing anger at corporate tax dodging. Adrienne Margolis poses the question: How can commercial lawyers respond to demands for tax justice? In order to improve revenue raising from multinationals operating in developing countries, L4BB demands a legal aprroach that sidesteps technical distinctions between legitimate tax planning, tax avoidance and tax evasion and focuses instead on a more widely defined notion of 'tax abuse'

ANND has issued a statement on World Bank loans in response to the Syrian refugee crisis. As almost 2 million Syrians have been displaced in neighbouring countries, the World Bank has started to issue loans, such as a $150 million loan to support Jordan. However as Jordan (and also Lebanon) are heavily indebted civil society groups are asking for grants to be issued in place of loans to allow the affected countries an opportunity to recover.

The OECD Development Assistance Committee (DAC) is currently reviewing the rules to report donors’ loans as Official Development Assistance (ODA). This discussion is taking place against a backdrop of aid cuts across Europe and raises concerns about the intentions of DAC donors. There are risks that the poor will be short-changed if the new rules make it easier for donors to inflate their aid figures further without making fresh money available and that debt sustainability will be undermined if loans [...]

The Human Rights Institut of the International Bar Association (IBAHRI) launched a new report adressing tax abuse from the perspective of human rights law and policies. The report, compilated by an expert task force, offers new insights into the links between tax abuses, poverty and human rights. This report analyses the responsibilities and remedies to counter tax abuse and delivers specific recommendations for states, businesses and the legal profession.

At the level of the European Union a new anti-money laundering directive is currently under way. German NGO World Economy, Ecology and Developmet (WEED) has recently taken up the issue in a factsheet and focusses on the situation in Germany specifically. Contrary to popular perception, Germany is a popular destination for money laundering activities. Being a liquid market with high cash flow makes the country attractive while also complicating the monitoring of financial flows. Its central location between Eastern and [...]

"When the delegations arrive in Washington next week for the Annual Meetings of the International Monetary Fund and the World Bank, they will face a situation that the citizens of IMF programme countries know all too well: The public sector has shut down due to a debt crisis and the policy response that followed. Let’s see if this helps to make the governors of the international financial architecture’s most powerful institution learn some lessons and make the right decisions," writes [...]

Oxfam has recently published a report alarming the public of the consequences of the austerity measures used to equalize the EU economies after the debt crises. The mechanisms used, have increased the risk of poverty in Europe as people are increasingly burdened by the taxes being enforced on them. Oxfam has released four recommendations that governments must implement to create a fairer society.

The long litigation odyssey between the government of Argentina and holdout creditors continues. Debt justice campaigners in Argentina and the USA are enraged about a new ruling by the New York appeals court in favour of the vulture funds NML Capital Ltd and Aurelius Capital, which sued for full payment of US$1.3 billion of holdout debt. The New York court upheld the previous ruling that Argentina must repay the vulture funds every time it repays the creditors that participated in [...]

Campaigners of 34 organizations such as Christian Aid, ActionAid International, Oxfam, the Global Alliance for Tax Justice, Tax Justice Network have endorsed a briefing on the fight against tax dodging. In their statement from 31st August they forcefully warn the members of G20 countries' summit meeting in St. Petersburg on 5th and 6th September to declare reforms on the global tax system and make transnational corporations pay their fair share. Moreover the campaigners present concrete reform steps but insist on [...]

In an article for Financial Transparency Coalition, a transparency watchdog, economist Ann Hollingshead describes the relationship between income inequality, wealth and illicit financial flows in the context of Asian economic development. In Asia, a strong export sector and high overall growth rates have led to the creation of a large number of extremely wealthy individuals. In turn, these have attracted banks, which play a role in moving money out of these countries. This has adverse consequences for Asian states' ability [...]

Economic Crises as Gender Unequal

The 2008-09 crisis led to greater job loss and poverty among women than men. US national unemployment was 10 per cent by September 2010, but in several US counties it was as high as 20 per cent.[1] Although manufacturing jobs that are typically “male” such as in automobiles were the first to be hit during the crisis, layoffs in teaching, nursing, the public sector, etc, meant that women's jobs were not growing as fast [...]

The European Commission’s recent accountability report and communication on financing for development highlights the importance of domestic resource mobilisation, tackling illicit financial flows and meeting aid promises. But it contains no substantive new commitments, ducks issues of wider systemic reform and adopts an alarmingly one-sided endorsement of stepping up the use of public money to leverage private finance. These are the conclusions of an article written by Jesse Griffiths, Øygunn Sundsbø Brynildsen, Jeroen Kwakkenbos, María José Romero and Bodo Ellmers [...]