The prevailing international tax rules and practices, as well as the failure of governments to cooperate on international tax matters, continue to undermine the ability of governments in the Global South and the North to ensure that corporations and wealthy individuals pay their fair share of taxes. The recent “Luxembourg Leaks” has confirmed that multinationals continue to dodge taxes with impunity. This is the latest in a long list of corporate tax scandals involving major brand names including Glencore, Google, Amazon, Starbucks, Caterpillar, Deutsche Bank, Zara, McDonald’s, Associated British Foods and many more. Similarly, the recent ‘Swiss Leaks’ has revealed that wealthy individuals hide untaxed fortunes in hidden Swiss bank accounts.
At the same time, many governments themselves act in the interest of corporations, liberally providing tax incentives and signing tax treaties that enable huge outflows of public revenues. As a result, ordinary people all over the world carry a disproportionately heavy burden of raising tax revenues – while public services lack adequate resources to meet the needs of citizens. The continuing imposition of austerity measures and the increasing debt burden aggravate poverty and inequality within and between countries, making the need for tax justice more urgent than ever. Meanwhile, governments are compensating for the lack of available public funding in various ways such as incurring more debt and by entering into risky public-private partnerships with the very same multinational corporations that are dodging taxation. Privatization of vital social services, where profit principally drives service delivery and overrides basic human needs, is rationalized by the need to raise domestic revenues.
Instead of cooperating to solve the problems, the world’s governments continue to invent new tax incentives for multinational corporations and wealthy individuals as part of a global race-to-the bottom. Meanwhile, rigged global tax rules fail to protect the tax bases of the world’s poorest nations against erosion driven by international tax dodging. These global rules, which undermine global cooperation and ignore the interests of the poorest, continue to be negotiated and decided in closed forums of rich nations.
Continuing the tradition of the World Social Forum, which at the WSF in Porto Alegre in 2002 issued a “Universal Declaration on the right to tax justice as a component part of social justice,” and at the WSF in Tunis in 2013 issued a declaration on “Tax Justice for Social Justice,” we demand the following from our governments:
International cooperation for global solutions
- Establish an inclusive and well-resourced intergovernmental body on tax matters under the auspices of the UN, which can initiate and lead negotiations on a new UN framework convention on international cooperation in tax matters as a first step in the reform of international tax rules.
Automatic information exchange and tax transparency for multinational corporations
- Adopt a common UN standard of multilateral, automatic exchange of tax information with the option of non-reciprocal information exchange for countries with low capacity.
- Eliminate secrecy of beneficial ownership worldwide through public registers of beneficial owners.
- Ensure financial transparency by implementing annual public country-by-country reporting by multinational corporations.
- Ensure that tax administrations are well resourced.
Progressive tax policies to tackle inequality within countries
- Reduce inequality by adopting a full range of progressive taxation measures. Tax policy design and implementation must actively seek to reduce income and gender inequality.
- Make it the highest priority commitment to invest tax funds in the vital human development related public services and public infrastructure (e.g., health, education, water, housing, sanitation, transportation), sustainable development, adequate social protection floors and to reverse climate change.
- Provide the means for citizens to make their voices heard and hold governments accountable on their tax policy and how revenue raised is spent.
- Ensure fiscal policies are gender sensitive. This should include assessing and tracking the impact of regressive taxes, such as VAT, and the tax burden, and implementing measures to shift the burden away from poor women and men.
- Adopt and implement a financial transactions tax.
Fair international tax rules that make multinationals pay their share
- Ensure the review of Double Taxation Agreements to bring them fully in line with sustainable development and financing for development needs and agenda.
- Develop solid alternatives to the dysfunctional Arm’s Length Principle.
- Remove policies and treaties that erode the tax base of other countries
To promote the tax justice agenda, we commit ourselves to:
- Continue and strengthen our advocacy and campaign to influence and increase the pressure on decision makers for tax justice. This includes public mobilization and political advocacy to ensure our government leaders deliver vital tax justice decisions in the UN Financing for Development summit in Addis Ababa this July and beyond.
- Enhance our efforts to create strong social movements locally and globally to force governments and challenge multinationals to end tax dodging. This includes new campaigns to make multinational corporations pay their share of taxes. We will march this May Day under the banner “Working people pay taxes – corporations must pay their share” and mobilize across civil society for global tax justice action days, including this June 23, World Public Services Day.
- Promote gender justice as a key element of tax justice. This includes engaging at the national level to challenge discriminatory tax laws and ensure that tax policies recognize the invisible and unpaid care work of women.
- Advance tax justice as a means to deliver climate justice by generating financing, including for adaptation and mitigation.
- Work together to transform the current economic system that privileges corporations and the wealthy, drives inequality and hurts our environment. Our vision entails progressive redistributive taxation polices that fund the vital public services, end inequality and poverty, address climate change and lead to sustainable development.
We welcome that Global Alliance for Tax Justice, owned and driven by major regional networks in Africa, Asia, Latin America, North America and Europe, has invited wide civil society engagement and pledged at this World Social Forum in Tunis 2015 to collaborate and build global synergy for advocacy and campaigns and peoples’ mobilizations for tax justice.