Campaign Option: Tax Justice

Essential Info

It is widely recognised that a key issue threatening the development of economically deprived countries is illicit financial outflow. As the effects of the global economic crises are felt and people increasingly look for solutions, we are finding ourselves in a pinnacle time for the issues surrounding tax evasion to be recognised on the scale it deserves.

The World Bank found that illicit financial outflows amount to $500-800bn per year, of which 60-65% is due to corporate tax evasion. (Christian Aid report). Considering the total worldwide aid budget is $106 billion and the total amount of private corporate assets held offshore is $11.5 trillion (Kohonen and Mestrum 2009), there is no question as to the appalling and profound injustice of corporate power.

As the majority of the developing population cannot afford food, shelter and have minimal basic services such as sanitation, this draining of precious financial resources for corporate gain is nothing short of disgusting. Tax evasion is a universal problem epitomising the obscene power of corporations that we are all victims of.

Accountability and fair financial practice has never been more vital, especially for the poor and deprived of which are, and will suffer most from the global economic downturn. If governments in developing countries actually received their rightful taxable income from corporations, then many of the problems associated with international aid (to support those suffering from poverty) wouldn’t apply. This is a justice issue of which all will benefit from, on a national and international scale.

Unless we quickly start applying our knowledge and resources in a united campaign for Tax Justice, then any efforts made for development or economic security will be undermined, entirely unsustainable and ineffective.

Aim & Objectives

The overall aim of this campaign would be to tackle the root cause of poverty and provide governments from the global south with a sustainable source of revenue they are more entitled to, thus upholding economic sovereignty, providing a better chance for effective sustainable development and an increased profile on unacceptable corporate exploitation for the maximization of profit.

Objectives include:

• Raise the public and political profile on corporate tax evasion

• Push for institutional change in universities which expresses clear support for international tax justice through the education, discussion and promotion of such related issues and debates.

• Campaign for teaching about corporate tax evasion in universities to make students even more aware of the issue and inspire them to change the practices of accountancy firms and MNCs from within.

• Pressure the government for increased transparency and accountability from corporations on their taxable payments, in the form of mandatory and publicly accessible country by country reporting from corporations. If corporations are to demonstrate fair and just financial practice in the countries with which they operate, then country specific reporting would be essential element. Having such reports publicly accessible is vital for maximum transparency and for the success and development of challenging the corporate powers.

Each of these aims could be specifically targeted around the ‘Big Four’ largest accountancy firms in the world: PriceWaterhouseCoopers, Deloitte Touche Tohmatsu, Earnest & Young and KPMG.

Large multi-national accounting companies should be there to ensure all financial transactions done by corporations are properly reported, processed and accounted for. ‘The Big Four’ encompass the 4 biggest accountancy firms in the world. If corporations are to be made accountable for their taxable payments and tax justice achieved, accountancy firms will have to play a significant part.

Targets & Strategies

These aims can be achieved by a People & Planet campaign through sustained and informed strategic action such as:

• Demonstrations outside the offices of accountancy firms (particularly the ‘Big Four’) and targeted corporations using non-violent direct action.

• Encouraging individual action such as switching to Cooperative Banks and boycotting banks that evade tax.

• Campaigning at graduate recruitment fairs to discourage students from working for these immoral companies

• The lobbying of MPs for further action and pressure opposing tax evasion and,

• Student Unions refusing to collaborate with MNCs exposed for tax evasion.

• Joining the Tax Justice Network for a united and wide reaching campaign.

Actions for Groups

• Organise debates, speakers, other events raising awareness, petitions on the streets, ect.
• Creative demos at recruitment fairs and company offices/headquarters…
• Meet with senior management on campus or pass motions through student councils to get universities/student unions to change the banks/accountancy firms they hold shares with or have involvement with (those shown to be unaccountable or proven to be active in tax evasion should be boycotted).
• Write letters and meet MPs to lobby them. Get petitions signed to push support for a tax justice campaign via suitable means.
• Join G20 march (2nd April) and get involved in other organised campaigns.
• Meet with professors in relevant departments (Business, economics, int. affairs, engineering) to encourage them to incorporate tax dodging into their teaching to turn their students onto the issue with further debate and research.
• The creation and publication of a ‘Tax Justice League Table’. The corporations shown to be most responsible for their tax payments at the top, the ones least accountable and likely to be involved in tax evasion at the bottom.

Pros & Cons

Pros

• Draws on previous actions, topshop/go green/ RBS/ E.on etc
• Spotlight on regulation and corp. abuse of power due to global recession, it’s easy to see how the same issues affect us as well therefore a good time to call for more transparency.
• UK government also loses tax revenue so the campaign includes those more concerned with UK interests.
• Opportunity to join forces with other campaigning organisations, and use research already published.
• There are clear identifiable target corporations
• Clear achievable benefits from achieving the goals

Cons

• A campaign on the issue of Tax may not appeal to everyone.
• A lot of students will be considering careers with accountancy firms or big MNC employers. We don’t want to alienate or vilify them.
• The problem is huge and has many different players which need reforming: Accountancy firms, multinational corporations, banks, tax havens, government, thus it will be hard to feel like progress is being made.
• It isn’t student specific, P&P would effectively be joining an existing (although largely underexposed) movement, but of course offers unique strengths.