Improving South Africa’s Mining Revenues and Transparency

Improving South Africa’s Mining Revenues and Transparency

Report for Economic Justice Network of FOCCISA, South Africa (October 2015)

Taxes from mining contribute significantly to South Africa’s economy. Yet the country’s mining sector is insufficiently transparent while companies’ use of tax havens increases the risk of illegal tax evasion and tax avoidance. Together with generous tax incentives given to mining companies, the effect is to reduce revenues to the state. There is a growing sense in South Africa that the minerals in the ground belong to the people and that they should contribute even more to national economic development. This briefing suggests that South Africa could and should raise more revenue from mining by taking action nationally and internationally to review its tax policies and help break open the financial secrecy of tax havens.

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TTIPing Away the Ladder: How the EU-US Trade Deal Could Undermine the Sustainable Development Goals

TTIPing Away the Ladder: How the EU-US Trade Deal Could Undermine the Sustainable Development Goals

Report for Trade Justice Movement (September 2015)

The United Nations has developed a set of Sustainable Development Goals (SDGs) that world governments are expected to use to frame their political policies over the next 15 years. At the same time, the world’s two largest trading blocs – the European Union and the United States – are negotiating a major trade pact – the Transatlantic Trade and Investment Partnership (TTIP) – aimed at achieving ambitious cuts in trade barriers and investment regulations. This briefing argues that these two processes are incompatible and that TTIP could undermine the world’s ability to achieve the SDGs. Developing countries have not been involved in the TTIP negotiations – a scandal in itself – but TTIP will revise trade and investment rules between the US and EU that are very likely to become global standards; these will undermine developing countries by further forcing open their markets to US and European companies.

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The West African Giveaway: Use and Abuse of Corporate Tax Incentives in ECOWAS

The West African Giveaway: Use and Abuse of Corporate Tax Incentives in ECOWAS

Report for ActionAid International (August 2015)

Curtis Research part-wrote and contributed research to this report, which examines the use of tax incentives in West Africa, focusing on Nigeria and Ghana. Corporate tax incentives are fiscal provisions offered to investors, and include reduced corporate tax rates or full ‘holidays’, permitting companies to pay less tax on their profits than normal, or to benefit from reduced or no tax on services such as water, electricity or land. Tax incentives are used by governments in the belief that they will help attract foreign direct investment into their countries, but evidence shows this to be rarely the case. The analysis shows that Ghana is likely losing up to $2.3 billion a year, Nigeria around $2.9 billion and Senegal (in 2009 at least) up to $639 million. If the rest of ECOWAS lost revenues at similar percentages of their GDP, total revenue losses among the 15 ECOWAS states would amount to $9.6 billion a year.

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Health Spending, Illicit Financial Flows and Tax Incentives in Malawi

Health Spending, Illicit Financial Flows and Tax Incentives in Malawi

Joint article in Malawi Medical Journal with Bernadette O’Hare (University of St Andrews, Scotland / College of Medicine, University of Malawi) (November 2014)

Malawi suffers from a high disease burden, with one of the highest maternal mortality rates in the world and with more than 1 in 9 children dying before their fifth birthday. This article examines Malawi’s health spending in light of the the revenues it loses through providing tax incentives and through illicit financial flows. Malawi needs to spend around $530 million each year to provide a minimal health package for all its citizens, yet government and donors are spending only around $400 million. At the same time, Malawi is losing nearly $400 million a year from the provision of tax incentives and lost tax income from illicit financial flows out of the country. If these lost revenues were recovered, Malawi could pay for a minimal health package from its own resources. (The weblink to this article is here)

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Honest Accounts? The True Story of Africa’s Billion Dollar Losses

Honest Accounts? The True Story of Africa’s Billion Dollar Losses

Report for Health Poverty Action, War on Want, World Development Movement, Jubilee Debt Campaign and others (July 2014)

This report is a first comprehensive attempt to measure the financial flows in and out of sub-Saharan Africa. It shows that Africa is being drained of resources, losing far more each year than it receives. While $134 billion flows into the continent each year (mainly in the form of loans, foreign investment and aid) $192 billion is taken out (mainly in profits repatriated by multinational companies, tax dodging and the costs of adapting to climate change). The result is that Africa suffers a net loss of $58 billion a year. Thus the idea that we are aiding Africa is flawed; it is Africa that is aiding the rest of the world. While we are led to believe that aid from the UK and other rich countries is a mark of our generosity, the research shows that wealthy countries benefit from many of Africa’s losses.

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Losing Out: Sierra Leone’s massive revenue losses from tax incentives

Losing Out: Sierra Leone’s massive revenue losses from tax incentives

Report for Budget Advocacy Network, Sierra Leone (April 2014)

This report analyses Sierra Leone’s ‘tax expenditure’ – i.e., the amount of revenues lost by the government’s granting of tax incentives and exemptions. Using figures obtained from the National Revenue Authority, the report estimates that the government lost revenues worth $224 million in 2012, amounting to an enormous 8.3 per cent of GDP. In 2011, losses were even higher – 13.7 per cent of GDP. The massive rise in revenue losses since 2009 is the result of tax incentives granted to the mining sector. The report estimates that the government will lose revenues of $131 million in the three years 2014-16 alone from corporate income tax incentives granted to five mining companies. Tax expenditures could instead be spent on improving education and health services, investing in agriculture and in providing social protection to vulnerable groups. Yet in 2011 the government spent more on tax incentives than on its development priorities. In 2012, tax expenditure amounted to an astonishing 59 per cent of the entire government budget – over 8 times the health budget and 7 times the education budget.

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Malawi’s Mining Opportunity: Increasing Revenues, Improving Legislation

Malawi’s Mining Opportunity: Increasing Revenues, Improving Legislation

Report for Norwegian Church Aid-Malawi and Catholic Commission for Justice and Peace-Malawi (July 2013)

This report analyses Malawi’s tax revenues from mining, focusing on how legislation can be improved to ensure that Malawians benefit more from the country’s natural resources. The report finds that although mining makes up around 10 per cent of Malawi’s exports, it contributes less than 1 per cent of its total revenue. Tax incentives given to mining companies are costing Malawi at least 8 times more than the revenues received; a loss that could cover 60 per cent of the costs of the Ministry of Health.

The company managing the largest mining project in the country – Australian uranium miner, Paladin – has been given extensive tax incentives, meaning that it is paying very little in tax. Revenue losses to Malawi from the tax regime given to Paladin are calculated at $205–281 million over the 13 years of the project. It is encouraging that the government is committed to revising the mining legislation, but progress is slow and the currently proposed revision of the Mines and Minerals Act is little better than the existing Act.

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Enough Food for Everyone If…: The need for UK action on global hunger

Enough Food for Everyone If…: The need for UK action on global hunger

Report for UK NGOs (January 2013)

Curtis Research researched and wrote the first draft of this report, which outlines some of the key challenges facing the UK and other developed states relating to their policies on global hunger. The report is the launch document for a UK campaign, the successor to Make Poverty History, to change certain UK government policies on agriculture, nutrition, tax, biofuels, land grabs and policy transparency. It calls on the UK, and other G8 states, to invest in small farmers and those suffering from undernutrition, address damaging biofuels and land grabs policies, take steps to end tax haven secrecy and improve transparency of policies.

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The Hunger Games: How DFID Support for Agribusiness is Fuelling Poverty in Africa

The Hunger Games: How DFID Support for Agribusiness is Fuelling Poverty in Africa

Report for War on Want (December 2012)

This report shows that hundreds of millions of pounds of British taxpayers’ money is being used to promote projects designed to benefit some of the world’s richest agribusiness corporations and to extend their control over the global food system. DFID is at the centre of an intricate nexus of corporations and donor-sponsored institutions seeking to maximise private profit from agriculture. Personal connections play a vital role, and there is a significant ‘revolving door’ of staff between DFID and agribusiness corporations, with the personal links going beyond DFID to the heart of the UK government and its economic policy. In addition, this report reveals DFID’s involvement in a network of private enterprises and investment fund managers incorporated in the secrecy jurisdiction of Mauritius.

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Tax Incentives and Revenue Losses in Kenya

Tax Incentives and Revenue Losses in Kenya

Report for Tax Justice Network-Africa and ActionAid-International (June 2012)

The government of Kenya is providing a wide range of tax incentives to businesses to attract greater levels of Foreign Direct Investment (FDI) into the country. Yet this study shows that such tax incentives are leading to very large revenue losses and are anyway not needed to attract FDI. Recent government estimates are that Kenya is losing over KShs 100 billion (US$ 1.1 billion) a year from tax incentives and exemptions. Of these, trade-related tax incentives were at least KShs 12 billion (US$ 133 million) in 2007/08 and may have been as high as US$ 566.9 million. Thus the country is being deprived of badly-needed resources to reduce poverty and improve the general welfare of the population. In 2010/11, the government spent more than twice the amount on providing tax incentives (using the figure of KShs 100 billion) than on the country’s health budget – a serious situation when 46% of Kenya’s 40 million people live in poverty (less than US$ 1.25 a day).

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