There is international agreement that governments will work together to reform corporate taxation and close down the opportunities for tax avoidance; a contributing factor in the rise of poverty. Discussions have progressed to debating the best mechanism for this Destination Taxation’ or ‘Unitary Taxation.
Heartening thought this is, the reality is that individual governments are making little progress on abolishing Tax Havens, a barrier long recognised as a serious impediment to the development of poverty ridden countries.
However a glimmer of hope on another battle front came yesterday in the form of a consultation document that focuses on the regulation of high-risk promoters who provide support and products on corporate tax avoidance. (some of which are said to place interns into HMRC)
These little glimmers of hope are like a two way highway with a convoy of delivery vans carrying the reforms and legislation to create a more just world travelling in one direction whilst travelling in the opposite direction is a convoy of juggernauts carrying the high goal of profit and protectionism to the rich men in their castles. One such juggernaut is the current brokering of a Trans Pacific trade agreement between America and Australia, both of which identify themselves as based on the model of western ‘free trade’, and Asian countries based on a kind of ‘state capitalism’ in which the state has a significant role. America and Australia in the name of free trade, which is somewhat hypocritical given their protectionism of agriculture and the state rescue of banks, wants to impose conditions to make transactions ‘fair’ but which would have far reaching implications for developing countries such as Malaysia, Vietnam and Singapore whose economy and development policies are interdependent. The discussions take place in secret so lets hope this juggernaut gets hijacked.