National civil society groups have joined Canadians for Tax Fairness to step up its fight against the global tax avoidance epidemic by pushing for strong UN action. In a letter to Finance Minister Bill Morneau and Global Affairs Minister Stephane Dion, the groups call for establishment of an intergovernmental body that can tackle cross-boundary tax avoidance and evasion. It is a concept endorsed by UN Secretary-General Ban Ki Moon, independent experts on human rights and poverty issues, and by the Independent Commission for the Reform of International Corporate Taxation.
“The international tax dodging industry is profiting from anemic international co-operation on tax rules and standards,” says Canadians for Tax Fairness executive director Dennis Howlett. “The Panama Papers, Luxembourg Leaks, and numerous other global schemes have exposed large-scale tax evasion and avoidance. Individual governments can make some changes to stop it – but just like fighting international terrorism or environmental degradation – countries are more effective when they work together. “
Weak international response to tackling tax havens costs Canada $8Billion a year in lost tax revenue. But Howlett says failure of international cooperation in tax matters costs developing countries $70-120 billion per year.
“By exposing the tax systems of all countries to this financial pillaging, governments are deprived of the vital resources needed to provide public services and ensure human rights.,” says Howlett. “It is a failure with enormous human impact. Yet it can begin to be solved with transparency, global standards and common sense.”
Howlett says there is growing demand in the business community for action. “It would be of great value to small and medium enterprises well as multinationals,” he says. “Some CFOs have called for international consistency and a level playing field.”
The government of Ecuador, incoming chair of the G77, has announced its intention to propose a global tax body at the UN General Assembly during its next session. In Ottawa, Canadians for Tax Fairness has been working with the Ecuadorean Embassy on a roundtable on the issue at Carleton University in early Invited guests include Nobel economist Joseph Stiglitz who has been adamant about changes needed in the current global tax landscape.