Image credit: Konrad Lembcke
According to the Tax Justice Network Australia, “As much as US$255 billion is lost every year to governments around the world because of the no or low taxation of funds in offshore centres.” While we grumble about paying too much tax, it is necessary to provide essential services, in keeping with Catholic Social Teaching.
Greed and the motive for increasing profits in a globalised world have led to the sophisticated techniques used by corporations, criminal gangs and individuals with the means, to dodge paying tax in the countries where they operate. The effects are especially felt in developing countries where governance is weak and the income is poor. For them it is a matter of life and death. Nicholas Shaxson http://goo.gl/lgG9sN describes how tax avoidance works, including how governments are part of the systemic failure.
Instigated and led by the United Voice agency of the Uniting Church, the Tax Justice Network consists of individuals and organisations of which our PEJ Centre is one. It is making its presence felt in Australia. Through research, submissions and campaigns, it is asking the Australian Government to:
- Stop Tax Dodging by introducing laws that would provide:
- Automatic exchange of information between tax authorities about money flowing across borders,
- Disclosure by companies of how much profit they make and how much tax they pay in each country in which they operate,
- Tougher rules on disclosing the ultimate owners of companies and trusts so banks know who they are dealing with and can ensure that the money has not been illegally sourced, and
- Tighter tax laws and international tax rules so that developing countries are not cheated out of their fair share of tax revenue.
- Make Mining Companies accountable by introducing laws into Australia that would require mining, oil and gas companies to have to report on a country by country basis.
- Ban Bribery by making it illegal for companies operating in Australia to pay bribes in any form anywhere in the world.
In spite of criticism of the Tax Justice Network in the Newscorp media and by those with the most to lose, the good news is that the Australian Government has signed up to the OECD multilateral agreement to automatically exchange some tax information. http://goo.gl/FtJJ8f It’s a good start but there is still a way to go.
We as a small ministry can help spread the Gospel message of Good News for the poor by acting in solidarity with others with expertise which we don’t have. We participated in The Global Week of Action for Tax Justice during June as the final round of UN Financing for Development Negotiations occurred. It was an opportunity for the global Tax Justice Network to push for the establishment of a new global tax body where all governments have a seat at the table. In mid July, governments will meet in Addis Ababa, Ethiopia to decide how to finance the fight against poverty and inequality. Reshaping the global tax system is a crucial part of that fight. Together each one of us can and must do our little bit. See Take Action for what you can do.
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