To keep our supporters informed and connected, we send a weekly newsletter with highlights of recent progressive tax developments in Canada and around the world. Sign up to receive it. Here is this week’s roundup of tax fairness news:
A Paris court this month found UBS Group AG guilty of helping rich clients hide funds in Swiss bank accounts. UBS Group was fined €$3.7 billion (C$5.6 billion) on top of €$800 million it has been ordered to pay France. It plans to appeal the ruling. Similar high-profile charges have come down on HSBC, which in 2017 paid €$300 million to settle its case after the French government accused it of helping clients evade taxes. Credit Suisse AG was also fined $2.6 billion in 2014 for helping wealthy Americans stash money. Meanwhile in Canada, KPMG, one of the largest and best-connected accounting firms, was left completely off the hook in a secret deal negotiated with the Canada Revenue Agency for its role in promoting the Isle of Man tax evasion scheme for wealthy Canadian clients, with key government evidence deleted. Just as other countries are doing, the federal government needs to prosecute, instead of protect, giant influential firms such as KPMG for their role in promoting and enabling tax evasion.
Review of tax system
If there’s one thing that industry and advocacy groups can agree on, it’s the need to improve Canada’s current tax system, but what’s the best way to conduct a comprehensive review? Tax experts tackle that question in an Advisor’s Edge article this week featuring C4TF director Toby Sanger who highlights the need to have broad and meaningful public consultation with a diverse range of participants, instead of a narrow group of experts and insiders controlling the review and reform process.
How to shaft the little people
Our global allies over at Tax Justice Network (TJN) have put together this video from the perspective of a big firm accountant on the multiple tactics available to help rich people and corporations avoid paying their fair share. If you like this, you should also check out TJN’s The Taxcast – a monthly podcast of international tax fairness news.
New Anti-Money Laundering tool in BC
As calls continue for an inquiry into BC’s money-laundering problems, the province this week introduced a public registry to specifically target condo flipping. Developers will now have to report the identity and citizenship of anyone completing a ‘contract assignment’ -- when a buyer sells, or "flips" their purchase contract of a condo unit to another buyer. Transparency International Canada applauded the new registry as an important measure to restrict tax evasion. Other Anti-Money Laundering tools that would go further include a fully accessible Canada-wide public registry listing the beneficial owners of property and companies.
Billionaire politicians exposed
Anyone seeking an example of the usefulness of public registers should look to the Czech Republic, where billionaire Prime Minister Andrej Babis is accused of violating EU conflict of interest rules for remaining involved in his Agrofert chemicals company despite formally transferring the ownership. Meanwhile, the company continued to receive billions in government subsidies and took part in major public procurement projects. The Czech branch of Transparency International told media that it used beneficial ownership registers recently introduced by the EU to uncover 37 companies sheltered by the conglomerate listing Babis as the beneficial owner. It found another 28 listed under his wife, a board and trust fund member. The EU Commission has cut off subsidies and is auditing the PM’s business. A verdict is expected in April.
Trump’s tax returns
South of the border, another battle for transparency is being waged as Democrats build their case for releasing Trump’s tax returns. A Vox news story this week outlines different legal avenues they could use to obtain them, noting there may be enough evidence that the President has long engaged in tax schemes to warrant overturning the documents. The question of whether politicians should reveal their returns is one that has stirred debate not only in the US, but across the globe -- and one worth raising here at home.
Eye on Budget 2019
Canadians for Tax Fairness will again take part in the March 19 federal budget lock-up, where we’ll dissect the document and highlight which parts of the government’s plans help or hinder tax justice in Canada. We made our message clear to the Minister last summer when we submitted several recommendations including the need to close tax loopholes for the wealthy and take stronger action against international corporate tax competition. We also endorse the progressive tax policies proposed in the Alternative Federal Budget compiled by the Canadian Centre for Policy Alternatives.