End the era of tax havens: fair taxation to fund health and education
The Organization for Economic Cooperation and Development (OECD) is organizing a large plenary meeting on 21-22 June in the Netherlands to discuss international taxation with more than 100 countries. As this plenary meeting is taking place in Noordwijk, a coastal city close to The Hague, Oxfam Novib has asked a sand artist to carve a sculpture symbolizing all the lost tax revenues for state budgets due to corporate tax havens. This is a joined action with the Global Alliance for Tax Justice, as part of the Global Week of Action for Public Services. With this action we want to urge the OECD and all participating countries to have a more effective approach against corporate tax havens and to halt the ongoing race to the bottom on corporate tax.
Over the past few years the OECD has played an important role to stop tax evasion and avoidance. However, the OECD is not doing enough to end corporate tax havens. Some countries still do not tax profits at all, and use low tax rates or harmful tax practices to facilitate corporate tax avoidance (countries like the Netherlands, Switzerland, Luxembourg, Ireland, Singapore and Bermuda). In doing so, these countries fail to acknowledge the harmful effects of tax havens on tax revenues in other countries, including the poorest countries, and public services linked to those revenues.
Tax avoidance is a key factor in the rapid rise in extreme inequality seen in recent years. As governments are losing tax revenues, ordinary people end up paying the price: schools and hospitals lose funding and vital public services are cut. This year Oxfam has shown that just 8 men own the same wealth as the poorest half of humanity. The extreme inequality crisis threatens to undermine the progress made in tackling poverty during the last quarter of a century. Therefore, it is important that international tax standards help to address the tax problems of developing countries.
Finally, Oxfam has sent a letter to all participating delegates to call for a next phase of global policy making on key corporate tax issues that have been insufficiently addressed until now. This time, the reform process should involve all types of countries, including developing countries, on an equal footing and right from the start. For Oxfam, this means that all countries can actively participate, from the beginning onwards, in setting the agenda and designing new policies and standards, in contrast to what was now the case.
For more information, follow the twitter hashtag #endtaxhavens
- Johan Langerock is Policy Advisor for Fair Tax at Oxfam Novib