There are ways that Canada could curb corporations from using tax havens to avoid paying their fair share of taxes. The Japanese government has shown us one way to do this.
Japan has a law called the Tax Haven Counter Measure Law. It applies to any Japanese subsidiary in a low tax jurisdiction with a tax rate of 20% or less. Under this law, the Japanese parent is taxed on the undistributed earnings of these foreign subsidiaries.
When Canadians for Tax Fairness launched our campaign against offshore tax evasion last fall, many were skeptical anything could be achieved.
Some people said the banks, corporations and wealthy tax evaders would never be held accountable. A lot of people said we were wasting our time.
Today we have an international Tax Haven Action Plan to show them.
But we'd be vain to take much credit. You were the reason it happened.
The G8 Summit has issued an action plan on fair taxes, increased transparency and open trade called the LOUGH ERNE DECLARATION.
There are some problems with it. The commitments are hedged a bit and the roadmap for action is vague. But the declaration definitely moves us forward in efforts to curb tax evasion facilitated by tax havens. Here’s the upside:
Canadians for Tax Fairness Executive Director Dennis Howlett made a presentation to the House of Commons Finance Committee about a proposed piece of legislation - Bill S-17. The government has said it is one of the tools that it wants to use to get a grip on money flowing offshore. But Howlett has different advice. Here is his testimony:
Join a media stunt to press Canada to support a strong tax haven action plan at the G8
Oxfam Canada and Canadians for Tax Fairness have organized media stunts in several Canadian cities as Prime Minister Stephen Harper heads to G8 summit.
Media stunt: 156 empty plates
One empty plate represents a hungry person. 156 empty plates represent $156 billion in tax revenues lost from funds that wealthy individuals have hidden in tax havens around the world.
May 10, 2013: Canadian money stashed in the top 12 global tax havens has topped $170 Billion, according to data on foreign direct investment released yesterday by Statistics Canada. This amounts to a quarter of all Canadian money going abroad.
This figure is also equivalent to ten percent of Canada’s $1.8 trillion GDP.
Canadian money in tax havens is at an all time high - $160 billion at last count.. and growing. One of the main reasons rich Canadians and large corporations hide their money in tax havens is to avoid paying their fair share of taxes. How much are we losing? It is hard to say but we think it adds up to tens of billions of dollars.
That's not likely to change if today's Federal Finance Committee Report on Tax Havens has anything to say about it.
The CBC released a huge leak of information on tax havens received by the Washington, D.C.-based International Consortium of Investigative Journalists, a non-profit group that has shared the records with media outlets in 35 other countries. It is thought to be one of the biggest ever leaks of financial data.
CBC Television gave Canadians for Tax Fairness spokesperson, Dennis Howlett, top billing on its National News on March 22 with a story about the Federal Budget 2013's announcement that the government was going to crack down on tax cheats using tax havens.
The video report can be viewed here: http://www.cbc.ca/news/canada/story/2013/03/22/f-tax-offshore-evasion-whistleblower.html