Tax justice

Far from the headlines, a recent news item highlights the double talk of the major powers: the reform of the taxation of multinationals. After two years of negotiations, an agreement was adopted at the beginning of October, with the introduction of a global tax on corporate profits as its key measure.

The aim? To put an end to the devastating competition between states in terms of corporate taxation, which is causing a hemorrhage of resources at the expense of funding for rights such as access to water, health, education, or vaccines. At least US$483 billion in tax revenue is lost each year to tax abuse by multinationals and wealthy individuals. This would be enough to cover more than three times the cost of a full Covid-19 vaccine regimen for the entire world population.

The world will continue to be deprived of these funds. Negotiations led by the Organisation for Economic Co-operation and Development, the OECD, without really listening to developing countries, have only resulted in the introduction of a 15 percent tax on multinationals. This will only generate US$150 billion in additional tax revenue, which will, moreover, go primarily to rich countries. An additional US$250 billion could have been raised with a 21 percent rate, for example, or even US$500 billion with a 25 percent rate, as advocated by ICRICT, the Independent Commission for the Reform of International Corporate Taxation, of which I am a member, along with such figures as Joseph Stiglitz, Thomas Piketty, Jayati Ghosh, and Jose Antonio Ocampo.

Here again, the leaders of rich countries are concerned about the extent of tax evasion but remain convinced that the best way to serve their national interest is to submit to the injunctions of multinationals and the demands of tax havens. Most of these tax havens are not small islands lined with coconut palms: OECD countries are responsible for 78 percent of the annual tax losses worldwide to multinationals and the richest. The most hypocritical country is the UK, which, with its network of overseas territories and ‘Crown Dependencies’, is responsible for 39 percent of global losses.

Continuing to tolerate tax avoidance and tax evasion by most multinationals and the richest, and consequently depriving states of additional resources, is a direct attack on human rights. Without these funds, it is impossible to restore the health systems that have fought heroically against the virus – thousands of doctors and nurses have lost their lives – despite their meagre resources, which are constantly under attack by austerity programs. It is also impossible to give a future to all the children out of school during and due to the pandemic – 99 percent of children in Latin America, for example, were out of school for a whole year, and an estimated 3.1 million of them are out of school forever.

Without additional funds, it is also impossible to finance infrastructure, provide access to water or sanitation, or to daycares and nursing homes, all of which continues to increase the workload of women, who are the first victims of the pandemic.

Excerpted: ‘Tax Justice Is Not a Technical Battle, It Is a Crucial Tool to Advance Human Rights’.

Courtesy: Commondreams.org