PHL policy group urges G20 to end tax haven secrecy

A Philippine-based policy group is urging the G20 – composed of the world's top twenty finance ministers and central bank governors – to discuss how to eradicate the tax haven secrecy that allows transnational companies to hide their profits and avoid paying taxes to developing countries such as the Philippines. “We are urging the G20 countries to introduce measures to end the tax haven secrecy that is hugely damaging to both developing and developed countries," Filomeno Sta. Ana III of the Action for Economic Reforms (AER) said in a statement on Sunday. The G20 will be holding its Sixth Summit in Cannes, France, on November 3–4. According to Sta. Ana, 37 Filipino children below five years old die daily due to pneumonia, a preventable disease. Of every six Filipino school-age kids, one is not in school, and that the country loses billions of pesos through tax dodging every year. Meanwhile, Sta. Ana said measures the G20 could put in place against tax haven secrecy should include requiring companies to report the profits they make and the taxes they pay in every country in which they operate, and making the exchange of information between different tax jurisdictions automatic. Also, he said these proposed reforms should enable developing countries to better address tax evasion problems to increase their revenues for greater spending on public goods. “Since its founding in 1996, AER has always pushed for national tax reforms in order to mobilize domestic resources to finance development," Sta. Ana said, adding, “This is why we are at the forefront of the advocacy to reform the excise tax on tobacco and alcohol products—as a critical first step to increase the tax effort significantly." But he pointed out that "tax justice is a global endeavor that demands the reform of global tax rules by international institutions such as the G20." Moreover, he said that “While tax administration reforms at the country level are the key to combat tax evasion and avoidance, global rules addressing tax havens are also needed to complement country-level reform initiatives." “At the very least, we are hoping the G20 will take concrete and decisive action to end tax haven secrecy," he added. According to him, tax haven secrecy has contributed to the global financial crisis by attracting huge sums of "destabilizing capital" into offshore markets. For two days early next month, the G20 will seek to conclude the actions set in 2008, which aim to tackle the root causes of the worst economic crisis to hit the world since the 1930s. It also aims to broaden its agenda to include new actions aimed at sustainably improving global stability and prosperity. The G20 makes up more than 80 percent of the world's GDP, 80 percent of world trade, and two-thirds of the world’s population. Its members are the European Union, the United States, the United Kingdom, Australia, Canada, France, Germany, Italy, Russia, Japan, China, Brazil, India, Indonesia, Turkey, Mexico, Argentina, Saudi Arabia, South Africa and Republic of Korea. Since 2008, it has been meeting semi-annually. The November summit is the first time it will begin to meet annually. On the other hand, the G7 – a smaller but equally powerful economic bloc composed of the US, UK, France, Germany, Italy, Japan and Canada – makes up a little over half of the world’s total nominal GDP. AER is a group of economists, academics, and public intellectuals from multiple disciplines brought together by a shared vision of creating sustainable and equitable Philippine development through the passage of economic and policy reforms. In February, AER joined the international campaign to end tax haven secrecy. Initiated by a coalition of organizations from around the world, the campaign aims to demand tax justice at the G20 Cannes Summit. — LBG, GMA News