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Local authorities can respond to LuxLeaks

In the past days we have learned that hundreds of multinational companies have been given extreme tax breaks by the authorities of the Duchy of Luxembourg.

The scandal exposed by LuxLeaks does not come as a surprise. The fact that large companies operating in many countries frequently engage in aggressive tax evasion schemes has been public knowledge for many years.

What surprises us is the weakness of the political response. Action needs to be taken now, at all levels. In this work local authorities can and should play the leading role. It is, after all, the local authorities that in many countries have primary responsibility for welfare services that are undermined by tax evading instruments such as those exposed by LuxLeaks.

Many people now say that it is the lack of EU powers over taxation that is to blame for the scandal. We disagree. Harmonization of taxation across Europe is not a a panacea for fair taxation nor is it a prerequisite for enforcing taxation of profit in the member country of the EU where the profit is made.

A simple and straightforward reaction to the information that has surfaced would be for national and local authorities to analyse and define the methods used in the tax evasion schemes operating through the Luxembourg jurisdiction. Companies using such methods would then be excluded from tendering processes of local authorities. As this exclusion would have a geographically neutral basis it is fully compatible with present EU legislation. Even if the use of the methods documented in LuxLeaks would not constitute any breach of law, local authorities have the right and responsibility to take them into account in determining the most economically advantageous tender.

Such action should be seen as a supplement to other important methods in the promotion of fair taxation including the requirement that all companies participating in tendering processes must make country-by-country reporting of their financial activities publicly available.

Johannes Hirvaskoski, Member of Vantaa City Council, Centre Party, Finland

Thomas Wallgren, Member of Helsinki City Council, co-chair of the Social Democratic group, Finland

Carina Nilsson, Municipal Commissioner, Social Democratic Party, Malmö, Sweden

Bertil Dahl, Municipal Commissioner, Left Party, Kalmar, Sweden

Ingegerd Akselsson Le Douaron, City Councillor, Green Party, Stockholm, Sweden

Eric Loiselet, Regional Councillor EELV (Green Party) Champagne Ardennes (CC), France

David Belliard, Councillor of Paris, co-president of the green group at the Council of Paris, France

Emmanuelle Cosse,Vice President of the Ile de France region, National secretary of the EELV group, France

Jean-François Caron, Mayor of Loos in Gohelle, EELV Councillor of the Region Nord Pas de Calais, President of the Federation of the Elected Greens, France

Anne Souyris, Councillor of Paris, co-chair of the Green Group at the Council of Paris, France

Victorine Valentin, City Councillor of Colmar, Councillor of the Alsace Region, Socialist Party, France

Cyril Kretzschmar, Regional Councillor of the Rhône-Alpes Region EELV Green Party, France

Joan Bosch, Podemos, Navarra, Spain

Cllr Ian Eiloart, Liberal Democrat Group, Lewes District Council, UK

Caroline Lucas, MP for Brighton Pavilion, Green Party, UK

Cllr Jason Kitcat, Leader of Brighton & Hove City Council, Green Party, UK

Lars Kjelkenes Giæver, City Councillor, Green Party, Lillehammer, Norway

Susanne Palsig, City Councillor, Socialist Party, Gladsaxe, Denmark

 

Stoppa storföretagens skatteflykt

EU-länderna förlorar årligen 1000 miljarder euro på grund av skatteflykt. Det är mer än vad samtliga EU-länder satsar på sjukvård. Med andra ord hade det funnits gott om resurser till välfärden – om alla hade betalat en rättvis skatt. I stället saknas det skattepengar. Oron gnager i allt fler medborgare när de ser hur sjukvården, skolorna, äldreomsorgen, kollektivtrafiken och hela det sociala skyddsnätet krackelerar.

Vi kan se en växande trend av nolltaxerare som helt enkelt har bestämt sig för att inte betala skatt. De har bestämt för att bryta med samhällskontraktet. I synnerhet multinationella företag har satt i system att manipulera sin bokföring, så att de stora vinsterna kan hämtas ut obeskattade i skatteparadis.

Frågan om skatteflykt via skatteparadis har tack vare påtryckningar från aktiva medborgare kommit på dagordningen i EU, men effektiva överenskommelser mot skatteflykt saknas fortfarande. Därför vill vi göra vad vi kan lokalt för att medborgarnas skattepengar inte ska gå till företag, banker eller fonder som deltar i skattefusket.

Till exempel genom att återta verksamhet i kommunal regi eller genom att ställa krav på land-för-land-rapportering av banker och av företag som lägger anbud i den offentliga upphandlingen. En sådan redovisning kan synliggöra om anbudsgivarna betalat en rättvis skatt i varje land de är verksamma i.

Kommuner som i offentlig upphandling kräver att anbudsgivare inte får utnyttja skatteparadis anser att det är i enlighet med lagens intentioner om god affärsetik, transparens och likabehandling. Vi företräder hederliga medborgares och hederliga företagares rättigheter. Ändå ifrågasätts om dessa åtgärder är i enlighet med gällande nationella lagar och EU:s direktiv om upphandling. Det behövs med andra ord ett förtydligande i lagstiftningen.

Om vi ska ha en möjlighet att återupprätta samhällskontraktet krävs att politiker på alla nivåer samverkar. Därför uppmanar vi såväl nationella politiker som EU-parlamentariker att aktivt driva på för ett regelverk som effektivt förhindrar skatteflykt.

Tidigare i år förstärkte EU möjligheterna att ställa sociala krav och krav på miljöhänsyn i offentlig upphandling. Det är utmärkt. Nu ser vi fram emot att EU aktivt stödjer skatteetiska krav i upphandlingen.

EU har tagit ett första steg vad gäller krav på land-för-land-rapportering i begränsad omfattning. Det redskapet behöver vässas och självklart ska det gälla för alla branscher.

Andra nödvändiga åtgärder är att upprätta offentliga register över företagens verkliga ägare och ett globalt avtal om automatiskt informationsutbyte mellan skattemyndigheter.

Det är ohållbart att världens länder tävlar om hur mycket de kan sänka skatterna. Det leder till ett ”race to the bottom” som alla förlorar på.

Det är vårt ansvar som folkvalda politiker att se till att samhällskontraktet återupprättas. Närmare bestämt att vi får till stånd ett hållbart skattesystem som kan säkerställa finansieringen av välfärden. Om vi inte lyckas visa att vi verkar för folkflertalets bästa, bryts förtroendet och ytterst hotas demokratin.

Fotnot: Undertecknarna är initiativtagare till ”Upprop för skatteparadisfria kommuner och regioner” www.taxhavenfree.org

Carina Nilsson, kommunalråd (S) Malmö
Bertil Dahl, (V) kommunalråd i Kalmar
Ingegerd Akselsson Le Douaron , (MP), kommunfullmäktigeledamot i Stockholm
Yildiz Akdogan, ordförande för Socialdemokraterna i Köpenhamn
Thomas Wallgren, Socialdemokraterna, stadsfullmäktigeledamot, Helsingfors
Johannes Hirvaskoski, Centern, stadsfullmäktigeledamot i Vanda
Lars Kjelkenes Giæver, Miljöpartiet, kommunstyrelseledamot i Lillehammer

Publicerad i Dagens Samhälle:

http://www.dagenssamhalle.se/debatt/stoppa-storfoeretagens-skatteflykt-9237

Local politicians initiate an international network for tax haven free local governments

thfc_yes.pngLocal politicians in Sweden, Norway, Finland, France, Spain and UK initiate a call for tax haven free cities and local governments: www.taxhavenfree.org. In addition, a Fair Tax Mark is being launched in the UK, the world’s first independent tax accreditation scheme: www.fairtaxmark.net.

 It has become increasingly difficult to guarantee citizens good welfare when there is not enough tax money. Tax avoidance and tax evasion is a growing problem, particularly since multinational corporations have set the system to manipulate their accounting in order to transfer profits to tax havens.

According to James. S. Henry from the Tax Justice Network a total of 21-32 trillion dollars is hidden away in tax havens. If the fortunes hidden in tax havens were fairly taxed, there would be plenty of resources for investment in welfare services, in international solidarity and in a sustainable transition that could save our climate.

Tackling tax evasion is mainly a responsibilty for politicians at national and international level, but in anticipation of an international framework local politicians can stop taxpayers’ money from going to companies, banks or funds that use tax havens for tax evasion. For example, by taking back services into public hands or by imposing requirements for country-by-country reporting, which would show if bidders in public procurement paid a fair rate of tax in every country they operate in.

Since 2010 French regions have started to act in order to require more transparency in the accounts of the banks they are working with. In Sweden, Norway and Finland some municipalities are taking strong steps towards increased transparency and responsible tax practices in their public procurement. Now local politicians initiate an international network for tax haven free local governments:

”I find it deeply immoral that tax-funded activities are trying to conjure away profits in order to avoid paying tax”. Carina Nilsson, Councillor, Socialdemocratic Party, Malmö, Sweden

”It must be our responsibility as politicians at all levels to ensure that every tax crown is used for our common welfare and not disappear off to tax havens.” Bertil Dahl, Councillor, Left Party, Kalmar, Sweden

“Everybody understands that we can not preserve the common welfare if our tax money goes to companies who do not pay taxes honestly. We simply have to win the fight against tax havens.” Thomas Wallgren, Member of the City Council, Socialdemocratic Party, Helsinki, Finland

”The local governments  take most of the responsibility for the regime of welfare services and this through tax financing. Therefore, we also must be active in the fight against tax evasion”. Johannes Hirvaskoski, Member of the City Council, Center Party, Vanda, Finland

”This is about a distortive market structure few people know the extent of. Tax havens are devastating to the honest players. Poor countries are most severly affected, but also you and me”. Lars Giæver, Member of the City Council, Green Party, Lillehammer, Norway

“Tax havens allow organised tax fraud. They support a parasitic capitalism which steals from the community, the earth and future generations”. Øyvind Solum, Member of the City Council, Green Party, Nesodden, Norway

 “Tax havens are legalized criminality. If we want to preserve the welfare of our societies and combat poverty, we have to get rid of tax havens”. Even Gran, Member of the City Council, Socialistic Left Party, Horten, Norway

”In the fight against tax havens, we local governments can be active players. We just have to choose as partners banks and other companies who do not evade taxes, by any means nor anywhere throughout the world.” Robert Lion, Member of the Regional Council, Ile de France (Paris region), Green Party, France

”Given the scarcity of public resources today, trying to evade taxes in every possible (including illegal) way, thereby refusing to participate to the collective effort, is immoral. Local governments have to take into account the “citizenship” of companies and banks in the selection of their suppliers.” Roland Ries, Mayor of Strasbourg, Socialist Party, France

“I think it’s financial suicide for the public sector to support companies that evade taxes. Local action will support and promote international legislation”. Ian Eiloart, Liberal Democrat, Member of Lewes District Council, UK

Putting an end to offshore tax havens is both a political obligation and a matter of social urgency. The decline of public services and the withdrawal of assistance for the underprivileged are creating even wider gaps of exclusion and poverty”. Txentxo Jiménez Hervás, Member of the Regional Parliament in Navarra, Aralar Party, Spain

“It is necessary and urgent to end tax havens in order to achieve sustainability of public spending with a fair tax system based on the principles of equality”. Marisa de Simón Caballero, Txema Mauleón Esparza and José Miguel Nuin Moreno, Members of the Regional Parliament in Navarra, Izquierda-Ezkerra Coalition, Spain

“In an inequitable world, in a cruel and depredator system, taxation can’t be dictated by economic, political and financial mafias. Economy must serve common people, not on the contrary. Turning the table is up to us.” Victor Rubio Martínez and Bikendi Barea Aiestaran, Members of the Regional Parliament in Navarra, Bildu Nafarroa Coalition, Spain

The Fair Tax Mark, which has been developed by a team of tax justice campaigners and tax experts, shows that a company is making a genuine effort to be open and transparent about its tax affairs and pays the right amount of corporation tax at the right time and in the right place.

Call for tax haven free cities and local governments

thfc_yes.pngTax is a condition for our common welfare and infrastructure. Our mandate as elected local politicians is to take responsibility for the money citizens pay in taxes. This mandate has unfortunately become increasingly more difficult to perform, since the tax-funded welfare is threatened by those who use the loopholes in the law in order to avoid paying tax. Multinational corporations have set the system to manipulate their accounting in order to transfer profits to tax havens.

While municipalities, regions and nations are tormented by the economic crisis, tax havens are flooded with money. A total of 21-32 trillion dollars is hidden away in tax havens. Due to tax evasion and tax avoidance, the European Union loses 1 trillion Euros every year, which is more than the total healthcare expenditure of all EU memberstates combined. Poor countries lose tax revenue exceeding the annual global total of development aid. This widespread tax evasion can only flourish because governmental institutions have not caught up with the globalized economy.

If the fortunes hidden in tax havens were fairly taxed, there would be plenty of resources for investment in welfare services, in international solidarity and in a sustainable transition that could save our climate. We all benefit from living in a civilized society with tax-funded common welfare and infrastructure. Therefore all should contribute and pay their fair share. Even the biggest companies and banks

Due to pressure from social movements and other organisations from the civil society, the issue of tax evasion through tax havens is now on the agenda of the EU, OECD, G8 and G20, but realising new global agreements takes time.

As local politicians we therefore want to stop taxpayers’ money from going to companies, banks or mutual funds that use tax havens for tax evasion. For example, by taking back services into public hands or by imposing requirements for country-by-country reporting, which would show if bidders in public procurement paid a fair tax in every country they operate in. Since 2010 French regions have started to act in order to require more transparency in the accounts of the banks they are working with. In Sweden, Norway and Finland some municipalities are taking strong steps towards increased transparency and responsible tax practices in their public procurement.

Local governments that require bidders in public procurement not to use tax havens believe that it is in accordance with the law’s intention with regard to good business ethics, transparency and equal treatment. Companies using tax havens in order to avoid paying their full taxes can put forward lower bids, which is contrary to the principle that all providers should have equal opportunities.

It is unfair to honest small business owners and it creates distorted markets.

Through democratic decisions we can promote tax justice. We want to achieve:

• Cooperation and transparency instead of the secrecy provided by tax havens, the corporate manipulated accounting and the tax competition between countries.

• A public register of companies’ real owners, including all shadow structures like trusts, private foundations and shadow companies.

• A global agreement on automatic exchange of information between tax authorities.

• Country-by-country reporting by multinational corporations in all sectors showing their financial activities for each country in which they operate to make visible their tax strategies.

We urge politicians at national and international levels to press for a new international framework that can assure the life-blood of our communities – namely, a fair taxation income.

Local governments in all countries can cooperate and better utilize the possibilities available today to be ”tax haven free”, i.e. to prevent tax money from going to companies, banks or other financial institutions that use tax havens for tax evasion.