Joint action against tax havens
04 November 2011
With the G20 counter summit being held less than 20km from one of the world’s most famous tax havens, it was apt that a recurring theme in the workshops and at the mobilisations has been tax justice. Yesterday, on the first day of the G20 talks, hundreds of people took the twenty minute train to the Monaco border for an action against tax havens. People were equipped with banners, placards and costumes– one person even went as a billionaire clown and kept setting up his own tax haven in the middle of the street (much to the police’s confusion).
At the border a group of ‘bankers’ tried to deposit money in a Monaco box, but the tax haven was declared closed! There was a great cheer from the crowd as confetti and fake money were dropped from a cardboard safe suspended in mid-air by a helium balloon. The action was largely symbolic, but it highlights a really important issue, and a timely one as the G20 heads of state discuss the shaping of the international financial system.
The past year has seen a growing movement against tax avoidance and calling for tax justice. This has coincided with the onslaught of the financial crisis, waves of severe austerity measures and bailouts of the banks using taxpayers’ money. Many businesses and people avoid paying huge amounts of tax using loopholes and mechanisms such as tax havens. In addition to this, the UK government allows companies such as Vodafone and Goldman Sachs to get away with not paying millions of pounds of taxes whilst the government carries out cuts to public services in the name of necessity.
But tax justice isn’t just about money being lost in the UK. I spoke to Guppi Bola who has been working on tax justice and the international Robin Hood Tax campaign:
Why are you here today?
We’re here campaigning at the centre of tax havens to represent why we’re angry about how the financial system works. But it’s not just about money moving out of countries in developed countries, but also about the impact this has on developing countries.
How do tax havens affect developing countries?
Public financing from developed countries in western nations is invested in extractive industries that work in developing countries. But the revenue from these industries is not invested back into the domestic resources of the country where the work is taking place. The money is ripped out of the developing countries and shifted into a tax haven which is veiled in secrecy.
This disables these countries from raising sufficient tax revenues and being able to invest in things like health and education which are fundamental. Tax havens and the systems used to avoid tax are forcing poverty on people. Recent calculations published by Oxfam Intermon in a report suggest that $400 billion is lost every year outside of just African countries where extractive industries work. This is a massive injustice that exists that needs to be sorted out.
What do you think European countries can do about this?
European countries could pass legislation on country-by-country reporting which shows where European industries are putting their money that comes in and out of various countries in the global south. Greater transparency and having a legal flow of money going around the world could help these countries decide for themselves what they want and which industries are actually benefitting the domestic economy rather than having to rely on aid.