2 December 2014
"Illicit financial flows, fueled by anonymous companies and tax haven secrecy undercut economic growth and tax revenues, drain roughly US$1 trillion per year from developing and emerging countries, and facilitate crime and corruption on a grand scale‚" according to Raymond Baker, president of Global Financial Integrity (GFI), a Washington-based research and advocacy organization. "The G20 passed up a golden opportunity to begin tackling this global scourge by curbing the abuse of anonymous companies and instituting public country-by-country reporting for multinational corporations" he added.
The annual meeting of world leaders that concluded recently in Brisbane failed to develop any new ideas or policies for curbing the misuse of anonymous companies.
The summit did affirm the agreement between 89 countries (including every G20 member) to exchange financial information automatically and reciprocally, but failed to address the extension of tax information exchange to the other more than 100 countries in the world.
The G20 leaders also made a critical step towards ensuring developing countries are included in efforts to revise international tax standards, however calls for a commitment to require multinational companies to publicly disclose basic financial information on a country-by-country basis, an important element of curtailing abusive tax avoidance by multinational companies, were ignored.
"Requiring companies to publicly disclose where they are operating, where they are making their profits, and where they are paying taxes is a common-sense approach to detect and deter corporate tax dodging" according to GFI spokesman Joshua Simmons. "The G20 is falling behind public sentiment by failing to embrace it" he said.