COFFERS results were presented to a group of stakeholders from Austria and Germany in Vienna, at the University of Economics and Business Administration, 21.1.2020. The focus was on the relevance of the COFFERS results for Small and Medium Sized Enterprises, which form the large majority of firms in Europe. A survey among Austrian tax offices and a survey among German SMEs were presented and confirmed that there are visible changes in the tax eco system also regarding SMEs. Major loopholes were seen in too low thresholds for company regulations, and in slow international exchange of information. Practical improvements which could help a lot would be standardized tax numbers within Europe, and better clarification of which type of income has been generated abroad. The COFFERS results proposed by COFFERS project leader Brigitte Unger and moderator Thomas Hampel were largely confirmed.
The EU-project, COFFERS, is about combating fiscal fraud and empowering regulators. That entails understanding the history of money laundering from from Al Capone to Al Qaeda. This animated short film with Brigitte Unger, our project leader, offers an introduction to the history on how the scope of money laundering expanded from drugs to terrorism and tax evasion. The only thing that should be laundered is laundry! https://www.youtube.com/watch?v=LSM6qHM0DRc
Richard Murphy’s recently published work on tax gaps, tax spillovers and their implications for modern monetary theory, to which we referred here when it was published in the Real World Economic Review in September 2019, has received a significant boost.
Prof Randy Wray, one of of the founders of modern monetary theory has said of the special edition in which the price was published “There is one good contribution made to MMT that doesn’t come from the inner circle of MMTers. This might be a first—at least, it is the first case I can recall. … So, this issue of RWER contains what I believe to be a first—an article that tries to fill a perceived gap. … Richard [Murphy] argues that “cash paid in tax is a residual figure arising from a plethora of decisions on tax bases, reliefs and allowances, as well as tax gaps that result from non-compliant taxpayer behavior”. Recognizing MMT’s argument (based on Ruml) that taxes are not really for revenue purposes, he argues for seeing “use of tax [instead] as a critical instrument in economic and social policy management”. I agree.
This is Coffers delivering new theoretical insights into a developing area of economic thought.
Two members of WP1, Professor Anastasia Nesvetailova and professor Ronen Palan, drew on their research on financial engineering as tax avoidance for the COFFERS project (formal deliverables D.1.6 and D.1.7) in their new book, entitled Sabotage: The Hidden Nature of Finance. The two deliverables informed in particular chapters 11, ‘The Bad: Derivatives, Tax Avoidance and Evasion’ and chapter 12, ‘The Crypto: Mining the Money’. The book will be released by Public Affairs in the US in January, 2020 and Penguin, in the UK in March 2020, followed by translation to German and Chinese. Here are the links from the UK publication and the US publication.
‘A major priority for the French government in hosting the 2019 G7 summit at Biarritz is to combat inequality, both within advanced economies and between countries. But if the G7 are serious about tackling inequality, there is a need to tackle the “race to the bottom” in taxation that affects governments around the world.’ Click here to read the Conversation article by Andrew Baker and Richard Murphy.
Andrew Baker, professor of political economy, University of Sheffield, and Richard Murphy, professor of practice in international political economy, City University, London, call on the G7 to task agencies with carrying out fairer assessments of global tax systems using a new framework. Read more in this article.
In July 2019, following the launch of the Corporate Tax Haven Index in May 2019, the Tax Justice Network offered the Inter-American Center of Tax Administrations (CIAT) two free, online webinars in English and Spanish. The webinars aim to train tax authorities to use the Corporate Tax Haven Index to evaluate and address their exposure to multinational corporate tax abuse. Over 100 officials from the tax administrations of 16 CIAT member countries from the Americas and Africa participated in the webinars, including Angola, Argentina, Bolivia, Brazil, Chile, Mexico, and the United States.
Both our Financial Secrecy Index and the Corporate Tax Haven Index, enable tax authorities, among others, to identify the biggest financial risks their country faces based on the secrecy and tax avoidance provisions; as well as to renegotiate or decide with which countries to establish double tax agreements to prevent lower withholding taxes that have an impact on their country’s tax revenues. For more information see here.