Asian Peoples' Movement on Debt and Development

A regional alliance of peoples’ movements, community organizations, coalitions, NGOs and networks

 

Resources

ISSUE BRIEF: Tax Justice Issues in the Philippines’ Investment and Trade Agreements

Tax regimes are commonly seen as separate from investments and trade regimes, with no substantive linkages in between. As well, investments and free trade agreements (FTAs), whether bilateral, regional or multilateral, appear to be only marginally connected with tax matters.

Read more

ISSUE BRIEF: Tax Justice Issues in the Philippines’ Extractives Sector

Large-scale mining investments of Australia, Canada, the United Kingdom, South Korea and China, partnering with local elites, continue to destroy lives, communities and the environment in the Philippines. Major mining disasters, the latest being the Philex Mine spill of toxic tailings, have wrought irreversible damage to ecological systems, as well as the local economies that depend on them. In truth, all big mining processes from exploration to extraction are disasters in the making, in icting damage on a daily basis to communities in the area and to the environment.

Read more

ISSUE BRIEF: on the Philippines’ Illicit Financial Flows – Public Money Down the Drain

The Philippines continues to be implicated in heavy illicit financial flows (IFFs), both inbound and outbound, which have been traced largely to the enduring practice of trade mispricing or the under/over-reporting of trade transactions.

Read more

ISSUE BRIEF: DTAs: the Philippine and Indonesian experience

With no internationally agreed tax standards in place, tax treaties or double taxation avoidance agreements (DTAAs/DTAs)have been described as “the most important element of the international tax regime, i.e., the generally applicable rules governing income taxation of cross- border transactions” (Avi-Yonah). They now reportedly number more than 3,000 across the world.

Read more

APMDD Gender and Tax Justice Primer

Read more

A Work in Progress

Illicit Financial Flows: Issues and Challenges from the Philippine Experience

The Philippines today counts among several Asian countries with the highest levels of illicit financial flows globally. Traced largely to various types of trade misinvoicing, these flows represent billions of lost and foregone tax revenues critical to developing countries such as the Philippines.

Loading...

A Universal, Well-Resourced, UN Intergovernmental Tax Body is in Everyone’s Interest

A Briefing for Government Delegations

by Oxfam, Financial Transparency Coalition, Christian Aid, Global Alliance for Tax Justice, Public Services International, ActionAid, Tax Justice Network-Africa, CIDSE, Eurodad, Latindadd, and Asian Peoples' Movement on Debt and Development

 

Civil Society Organizations are united in supporting the G77 and China’s call for a global intergovernmental tax body at the United Nations. The body should take the form of a Functional Commission under ECOSOC so outcomes are the result of intergovernmental negotiations, with universal membership and adequate resources from core UN funds with priority for developing country participation. 
 

Concern 1: Technical discussions on tax will be discouraged by ‘politicizing’ the discussions.

Response: An Intergovernmental tax body will ensure the technical and political support required to reach global consensus on international tax matters. It should be noted that the OECD is itself an intergovernmental body. OECD’s Committee on Fiscal Affairs is an intergovernmental body and is supported by OECD’s Centre for Tax Policy and Administration (CTPA) that offers technical expertise. 

CTPA is well resourced with a budget of EUR 10million as per 2013 financial statement. In contrast, the UN Tax Committee has an extremely limited budget of some $175,000/year, meets only five days a year, with members that work in their personal capacity and the Secretariat consists of 2.5 full-time staff members.

Concern 2: Universal membership will make the body too cumbersome to reach agreements.

Response: There are existing examples within the UN system of Intergovernmental bodies with universal membership. For example the UN’s Forum on Forests is a subsidiary body under the Economic and Social Council (ECOSOC) with universal membership. There are also examples of technical bodies supporting intergovernmental bodies, for example, the subsidiary bodies on scientific and technical advice under the UN Climate Convention and the Biodiversity Convention. Such bodies have shown themselves capable of negotiating legally binding agreements, despite having to manage significant political and technical differences amongst their membership.

Concern 3: The OECD has reached out to developing countries to participate in BEPS and other processes.

Response: OECD is answerable to its constituents- and cannot, and does not, represent developing countries. Few developing countries are involved in BEPS, with only G20 developing countries and OECD accession countries on equal footing[1], and not a single low income country is involved in decision making. This is far from the inclusive forum required. Outside of the G20 and OECD countries, 13 developing countries[2] are participants in the BEPS project but cannot participate in decision-making and cannot influence the agenda.

A joint proposal by IMF, OECD and World Bank published in 2002 at the time of the Monterrey Conference stated that ‘Although it has extensive contacts with non-OECD countries and considerable awareness of developing country issues through its non-member programs, the OECD does not represent the views of developing countries[3]

At the BEPS regional consultations, developing countries raised the issue that the balance between source and residence taxation is significant for them[4]. OECD has been unwilling to address this through BEPS since it challenges the underlying principle of residence tax bias in their policies- a principle that favours developed countries. 

Essentially, the argument is that the OECD would be happy to invite developing countries to participate but is clear that they won’t get a vote.

Concern 4: FfD3 is not the appropriate forum to consider this proposal

Response: Strengthening the role of the UN in international tax matters has been discussed since Monterrey and in Doha where there was a commitment to consider this issue at the ECOSOC level, a process which has been taking place every year since 2011. G77 and China have not only  expressed disappointment on the lack of movement to fulfil this mandate in this process but has repeatedly demanded, from 2011 to 2015, an intergovernmental UN body at this annual meeting.

What forum could be more appropriate for this proposal than FfD?

Concern 5: The Global Forum on Transparency and Exchange of Information for Tax Purposes exists and could perform these functions.

Response: Global Forum is not a standard setting body, it only implements OECD standards. It is an OECD-led body based in Paris, which oversees implementation of standards set by OECD. Its mandate is limited to ensuring the implementation of standards of transparency and exchange of information on request in the tax area[5].  This is very far from the sort of robust global intergovernmental body required to negotiate matters related to international tax cooperation.

Concern 6: Universal representation would mean including tax havens and secrecy jurisdictions in the body.

Response: There is no reason to believe that secrecy jurisdictions or tax havens can block debates in the UN any more than they have in the OECD. All stakeholders should be involved in these debates. If participation of secrecy jurisdictions as important as Switzerland, Luxembourg and UK (British Overseas Territories and Crown Dependencies include Cayman Islands, British Virgin Islands, Jersey, Guernsey, Isle of Man, Bermuda) have been considered appropriate in OECD’s efforts in tax transparency matters, it should not be a concern at the UN to include small secrecy jurisdictions in the debates. 

On the contrary, excluding any jurisdiction from global agreements would in fact increase the risk of isolating such countries and reduce ability to pressure them into cooperating. It may also provide incentives for some excluded countries to consider becoming tax havens, in the absence of a robust, inclusive global body that can enforce standards.

Concern 7: A universal UN tax body might inhibit global business.  

Response: The absence of a truly global, representative body has meant that developing countries are already taking unilateral decisions that deviate from standards set by OECD and other developed countries. Brazil, China and India have already been innovating in areas such as transfer pricing that departs from the OECD standard. Mongolia and Argentina have unilaterally cancelled tax treaties with their developed counterparts with Mongolia’s Vice Finance Minister noting at the time "We started to question why these countries would have greater advantages in Mongolia than us”[6].

This trend might intensify with the uncertainties that are expected to come along with the BEPS initiative. It is in the interest of business to avoid such fragmentation of tax standards and ensure that UN is leading global tax cooperation.



[1] Argentina, Brazil, Colombia, India, Indonesia, Latvia, People’s Republic of China, Russian Federation, Saudi Arabia, South Africa

[2] Albania, Azerbaijan, Bangladesh, Croatia, Jamaica, Kenya, Morocco, Nigeria, Peru, Philippines, Senegal, Tunisia, Viet Nam

Tax Justice Focus, Volume 10, Issue 1

{edocs}2015.tjf.v10.i01.pdf,100%,600{/edocs}

TAX JUSTICE NEWSBRIEFS, Issue 2, April 2015

{edocs}2015.april.tj.newsbriefs.i02.pdf,100%,600{/edocs}

Gender and Tax Primer

Fiscal policies of governments mainly involve revenues and expenditures. JSAPMDD considers these two main instruments of fiscal policy important for obvious reasons – examining whether governments equitably source funds and whether governments’ public spending of these funds is in keeping with people’s needs. However, though significant work has gone into holding governments to ac-count for their expenditures, there is still much ground to cover in taking governments to task and holding them accountable for the revenue-sourcing aspect of their fiscal policies, specifically taxation.

Download PDF

Basic Primer on Transnational Corporations and Tax Justice Issues

In many developing countries, transnational corporations (TNCs) enjoy more rights than citizens. This is certainly the case when it comes to taxes. Where development agenda hinge in large part on attracting foreign direct investments (FDIs), governments offer a range of substantial profit-based tax incentives to prospective investors and enter into treaties advantageous to corporations. These have been documented as resulting in huge profits for TNCs on one hand and massive foregone public revenues on the other.

Download PDF

Basic Primer on the Issue of Illicit Financial Flows in Asia

Of late, there has been increasing interest in mobilizing development finance in light of the failure of aid, loans and other financial transfers from North to South to realize human development goals, including poverty reduction. The Millennium Development Goals are also coming to a close with millions still living on less than $1 a day and no clear answers in sight where to source funding for the post-2015 development agenda. One of the issues in focus is improving the capacity of developing countries for domestic resouce mobilization by stemming the outflows of public financial resources.

Download PDF

Basic Primer on Double Taxation Avoidance Treaties and Free Trade Agreements

One of the forms of pressure imposed by North governments and international financial institutions on developing countries to attract prospective investors is to enter into various trade agreements and tax treaties. Among the most substantive and prevalent today are agreements to avoid double taxation (or DTAs for short) and free trade agreements (FTAs). Today, there is a greater scale of “international investment rule making”, with states increasingly forging “megaregional agreements” and surrendering their say over economic and trade issues to arbitration (UNCTAD, 2014).

Download PDF

The Debt Problem and Our Demands

The Illegitimacy of Debt

transforming-the-international-financial-system-sovereign-democratic-and-responsible-financingThe debt problem must be understood in its historical political and economic context. And, such an understanding points to the illegitimacy of the debt as a whole and the system that has spawned it.

The debt problem plaguing many South countries is the result of the exploitation and control of the resources, economies and peoples of the South throughout the history of colonization, neocolonization and capitalist globalization. The resulting impoverishment, weak domestic economies, the net outflows of wealth and resources and "reliance" on imports - all these lay the grounds for the constant drive for external capital infusion in the form of aid, investments and loans. Northern lenders use debt as an instrument for the continued plunder of the South -- actively cultivating the need to borrow and relentlessly pushing loans to the South. Aside from the northern lenders, the local elites benefited from these loans, not the peoples of the South.

DOWNLOAD: {phocadownload view=file|id=2|target=s}

Read more

JSAPMDD Framework on Fiscal Justice (work in progress)

On Tax Justice

Taxes and taxation involve people's resources. Peoples' movements and citizens groups should be concerned about this issue and the questions of who should be taxed, how taxation should be done, and how revenues from taxes should be spent.

  1. The state's right to tax goes hand in hand with the state's obligations to protect and uphold the rights of its citizens, promote equity and justice, provide for essential services and, be transparent and democratic in formulation and implementation of budget, spending and policies.

    The neglect, non-fulfilment and violation of these obligations results in the erosion of the legitimacy of the state. And a state or government whose legitimacy has been eroded also loses its peoples' support and thus will be unable to compel people to pay taxes no matter how progressive its tax structure may be.

  2. Taxes should promote equity and redistributive justice. Thus, it is fundamental that it be designed and implemented in an equitable and just manner. Those who have more (income & assets) should give more. Those who have the same level of income should also be taxed in the same level.

    Regressive taxes policies are those which do not account for differences in economic capacities and involve a comparatively heavier burden on low income classes and sectors . Taxation should not be an additional burden to those who do not earn enough or those who earn just enough to meet their basic needs and live a decent and humane life.

  3. Taxation is a means to raise revenues for the state to fulfil its obligations. Its ability to meet these obligations is affected by its capacity to raise revenues. It is vital that the state effectively and efficiently enforce tax policies that are just and progressive together with other programs and policies that strengthen the domestic economy . Governments must move away from reliance on borrowings and depending on aid.

  4. The raising of revenues however should be accompanied by transparent and participatory budget processes and a spending policy aimed at realizing social and environmental justice and people-centered development.

  5. Taxes should not be used to violate rights, undermine people's development and national sovereignty and cause harm to the environment.

Initial List of General Demands

  • Ending intervention and impositions by International Financial Institutions on national tax policies

  • Equitable and Progressive Tax System: Tax Relief for impoverished sectors; Gender Justice in Taxation

  • Compelling the rich to pay more; Reducing the regressivity of the indirect tax system; Gender justice in taxation

  • Ending preferential treatment to foreign investors and tax policies that promote neoliberal policies such as trade and investments liberalization, privatization and deregulation

  • Equitable and revenue efficient land and real property tax scheme that promotes agrarian reform, rural development, food sovereignty

  • Tax Incentives to promote social and environmental justice; Tax Disincentives to penalize social and environmental abuses

  • Ending massive tax evasion and avoidance by elite families, private corporations, multinational companies and other foreign investors;

Transforming the International Financial System: Sovereign, Democratic and Responsible Financing

transforming-the-international-financial-system-sovereign-democratic-and-responsible-financingThis platform forms part of the broader agenda of southern and northern movements, organizations, NGOs and networks working to end debt domination and build new financial and economic systems nationally and internationally. As such, it recognizes first and foremost that the establishment of sovereign, democratic, and responsible financial relations entails acknowledging and redressing the historically unjust and inequitable power relations between countries and between elites and the majority that for centuries have marked the lives of peoples, countries, and the environment. Secondly, it clearly implies reversing the autonomy, privileges and the corresponding legal standing that have been ceded to capital over recent decades.

This platform defines principles, rules and standards as basis for changing policies, processes and practices in financial transactions having to do with the accumulation of debt being claimed from countries of the South, in particular public lending and debt collection, public borrowing and debt payments, the issuance of public guarantees and accumulation of contingent liabilities.

DOWNLOAD: {phocadownload view=file|id=4|target=s}

Read more