Micah Challenge Australia Blog

 

The Micah Challenge blog is a space for discussion and debate about the issues of global poverty, faith, advocacy and justice and the Millennium Development Goals. This blog aims to provoke thought and challenge you to learn more about the issues discussed. We welcome your comments.

Micah Challenge is a global campaign of Christians speaking out against poverty and injustice. Click here to visit the Micah Challenge website.

  • G8 points us in the right direction on tax

    Posted by Jennifer

    30 June, 2013

    As promised, tax featured high on the agenda of the recent G8 meetings hosted in Northern Ireland. The resulting communiqué from this meeting of the leaders of the world’s largest economies indicated their desire to find solutions to global challenges of tax evasion and avoidance. And they did so in such a way that recognised the importance of these changes for developing countries. The communiqué said: “It is in everyone’s interests for developing countries to be able to: strengthen their tax base to help create stable and sustainable states; improve their ability to fund their budgets through their own domestic revenues; and increase ownership of their own development processes.” We couldn’t agree more! The outcomes of the summit included positive movement towards each of our three policy asks concerning tax justice. Country by country reporting of the financial affairs of multinational companies has been officially endorsed at the highest level and the OECD has been asked to develop a standard template that could… read more

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  • The business case against tax evasion

    Posted by Trevor

    19 June, 2013

    Bill Gates was in Australia recently and was asked on ABC’s Q&A about the ability of large companies like Microsoft to choose how much (or more to the point, how little) tax they pay. Gates observed that it is quite legal to minimize tax using havens and secrecy jurisdictions, and if governments want to change the rules to collect more taxes they should! (He also said that companies would be happy to pay more in tax but I think his nose grew a little at that point.) This is an important contribution to the debate about the way multinational tax avoidance is reducing government revenues both in wealthy nations and in the global South. If there are no legal impediments to aggressive tax minimization by multinational companies, it is bound to flourish. Sadly, taking advantage of low tax regimes and secrecy jurisdictions is part of most major businesses’ global plans. Apple, for example, is borrowing $70 billion in order to fund a share buyback and dividend payments, despite having over $100 billion in the bank. The problem – from Apple’s… read more

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  • Time to make global tax rules work for the poor

    Posted by Jennifer

    4 June, 2013

    Why does Marta Luttgrodt pay more tax on her informal kiosk business than a multi-billion dollar multinational corporation like SABMiller in Ghana? Why do developing countries lose around USD 160 billion each year due to just two forms of corporate tax evasion (transfer mispricing and false invoicing)? Does more than half of world trade really pass through tax havens as it appears to on paper? How can the Cayman Islands be home to around 57,000 people but have 92,000 registered companies? It's pretty clear that the global tax system is broken. When the wealthiest individuals and corporations avoid paying their fair share of tax in the countries where they operate, it is left to smaller businesses and poorer individuals to pay more in tax, or do without the services that governments provide. Corporate tax evasion has a particularly diabolical effect on poor countries. If the governments invested the money they lose to corporate tax evasion according to current spending priorities, it could save the lives of 350,000 children each year. We have been… read more

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  • Crackdown on Tax Dodging Needs to Go Global

    Posted by Mark

    22 May, 2013

    After all the attention focused on aid delays and asylum seekers in last week’s Federal Budget, you may be forgiven for not noticing that the Government also announced steps to crack down on multinational tax dodging. This move could raise an extra $4.2 billion over the next four years. The Government will crack-down on multinational companies being able to loan money to themselves and then claim the interest repayments as a tax deduction, a process whereby multinationals essentially receive a tax break for recycling money from one part of the company to another. Research by Dr Grantley Taylor of the Curtain Business School and Professor Grant Richardson (paywall) from the University of Adelaide found that for publicly listed Australian companies, this practice, along with the misuse of transactions between different parts of the same multinational enterprise (known as transfer mispricing), were the primary methods of tax avoidance in the period 2006 to 2009. These tax-dodging practices are also used by multinational companies to cheat developing countries… read more

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