The UN and other international organizations have warned that tax systems must be strengthened to meet the Sustainable Development Goals (SDGs). But according to the Tax Justice Network, multinational corporations are dodging about $500 billion in taxes each year – and the UK is the worst conspirator.

The Tax Justice Network this week published a new Corporate Tax Haven Index, which ranks countries by the risk they pose to the global corporate tax system. It assesses countries on the degree to which they enable tax avoidance and the share of global corporate activity in those countries. The larger the share of global corporate activity affected by the country’s tax system, the higher it ranks.

Four of the UK’s satellite jurisdictions  – the British Virgin Islands (#1), Bermuda (#2), Cayman Islands (#3) and Jersey (#7) – made it onto the list of “top 10 most corrosive corporate tax havens in the world.” Other countries on the list include the Netherlands (#4), Switzerland (#5), Luxembourg (#6), Singapore (#8), Bahamas (#9) and Hong Kong (#10).

“The UK, Netherlands, Switzerland and Luxembourg – the Axis of Avoidance – line their own pockets at the expense of a crucial funding stream for sustainable human progress,” Alex Cobham, the Tax Justice Network’s chief executive, said in a press release. “The ability of governments across the world to tax multinational corporations in order to pay teachers’ wages, build hospitals and ensure a level playing field for local businesses has been deliberately and ruthlessly undermined.”

According to the index, the “Axis of Avoidance” is responsible for half of the world’s corporate tax avoidance risks. And more than 40 percent of foreign direct investments reported by the International Monetary Fund (IMF) – about $18 trillion – are booked just in these jurisdictions, which offer corporate tax rates of 3 percent or less on average.

The implication of these jurisdictions’ complicity in tax avoidance is “colossal,” the Tax Justice Network says, as it makes countries’ legal corporate tax rates essentially meaningless. It has also sparked a “race to the bottom,” as countries compete for the lowest corporate tax rate in an effort to win foreign investments. According to the index, more than a third of the countries ranked (22 out of 64) offer a zero percent lowest available corporate tax rate, despite the publicly announced statutory tax rate.

In addition, the index lists the United Arab Emirates (UAE), United Kingdom and France as the worst offenders of driving down the withholding tax rates (tax on earnings) of low- and lower-middle income countries. Through treaties, these wealthy countries and others have secured lower tax rates on earnings from foreign investments than the average withholding tax rates of those lower income countries, cutting into their revenue. The UAE, for example, secured a withholding tax rate with Mozambique that was 25 percentage points lower than Mozambique’s average rate. Coupled with corporate tax avoidance techniques, these treaties are making it incredibly difficult for lower income countries to retain tax revenue, the Tax Justice Network says.

“When our laws for taxing global corporations stop working, the global economy stops working for the vast majority of us,” said Cobham. “Corporations should be taxed where their employees work, not where their ledgers hide.”

Although closing tax loopholes is a means to deliver the SDGs, it is also an end.

The first indicator of SDG 17 is, “…to improve domestic capacity for tax and other revenue collection.” An increasing amount of attention is being given to this issue, especially regarding tax collection in developing countries. But some are pointing out that just collecting more taxes is not enough to achieve the SDGs. Instead, institutions must be strengthened to use that tax revenue more efficiently.

Still, the Tax Justice Network argues that the breakdown of the global corporate tax system is contributing to extreme inequality, political extremism and failing democratic institutions. However, each step that countries take to lower their index ranking is one step toward cutting out tax havens and ensuring that multinational corporations are contributing appropriately to the countries where they’re actually conducting business. That, they say, is critical if we want the global economy to work for the majority of us, not just the wealthy.

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