TAX HAVENS COST DEVELOPING COUNTRIES BILLIONS OF DOLLARS
Activities of Offshore Financial Centres (OFCs) also known as “Tax Havens", cost developing countries over a hundred billion dollars every year; an amount which is estimated to be more than the entire global aid budget. Ghana, for instance, is quoted by Lars Koch-IBIS (2011) in a research as having lost approximately 4.9 billion dollars between 1970 and 2008 as a result of capital flight.
Speaking at a Forum on “Ending Tax Haven Secrecy”, Mr. Abdullah Ali-Nakyea, a Tax Expert revealed that the Tax Haven Secrecy, supported by developed countries, allowed multinational companies to hide profits and avoid paying taxes in developing countries, leading to huge revenue losses from excessive capital flight.
Mr. Ali-Nakyea said developing countries including Ghana, faced major challenges that patronised their ability to mobilise adequate domestic tax revenue to finance their national development and particularly to provide basic essential social services such as education, health, water and sanitation for their people. He revealed that through challenges such as corruption by some government officials, racketeering and counterfeiting, developing countries had become helpless victims of an unjust global financial system that provided incentives for the preparation of such criminal acts by providing secrecy financial jurisdictions for such illicit financial flows.
"Unless the veil of secrecy was lifted, all the talk about helping lift the world's poor out of poverty shall remain nothing but mere rhetoric." Mr. Ali-Nakyea stressed that without firm commitments from the leaders, the millions of malnourished children, with a lot more being denied access to basic education and the general poverty level in developing countries would be worsened.
Organized by the Integrated Social Development Centre (ISODEC) and the Ghana Tax Justice Coalition, the Forum is a platform to send a petition to the G20 and the European Union (EU) to introduce measures to end “Tax Haven Secrecy".
In this petition, the two groups asked that the leaders should impress upon the multinational companies to report on the profits made and taxes paid in every country in which they operated. They also asked that there should be an automatic exchange of information between different tax jurisdictions, which would help developing countries collect taxes they were owed. The petition, which will be channeled through the G20 country Embassies and the EU Ambassador in Ghana, would be discussed at the forthcoming G20 leaders meeting in France in November this year.
Mr. Ali-Nakyea expressed the hope that the petition would receive urgent attention and action as the G20, which constituted the world's leading industrialized countries meet, to help correct the financial injustice for the benefit of the world's poorest countries.
Bishop Akolgo, Executive Director-ISODEC, explained that in furtherance of its campaign objective of seeking a fair and just tax system in Ghana, the forum marked the Global Action Day in solidarity with the global campaign to end the tax haven secrecy.
comments powered by Disqus