Tax Archives - Curtis Research

Changing Track: Putting People Before Corporations

Report for Health Poverty Action (August 2018)

Curtis Research undertook research for this briefing which details how governments around the world are allowing billions of dollars to be diverted to corporations every year at the cost of human rights and public services. It estimates that the amount of money being diverted every year amounts to over $1 trillion – enough money to cancel all government debt of impoverished countries or triple the money spent on healthcare for half the world’s population. The report analyses a range of ways in which resources are directed towards corporations, including the extent of global corporate tax avoidance, excessive corporate profits, fossil fuel subsidies and agricultural subsidies.

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Categories: Climate, Companies, Food & Agriculture, Health, Tax

How Have ‘Developing’ Countries Actually Developed? Alternatives to Neoliberalism

June 2018

This paper reviews how several developing countries which can be considered successes (with qualifications) have progressed economically, briefly capturing what policies and institutions might explain their performance. The analysis considers Mauritius, South Korea, Ecuador, Cuba, and the Nordic model/Norway. It also briefly considers Chile – a country whose ‘success’ is sometimes explained by neoliberal policies – and Botswana – often held up as Africa’s most successful developer.

In recent decades, the British and US governments, in particular, have largely promoted neoliberalism in developing countries as a supposed strategy to reduce poverty and promote economic development. Perhaps better described as ‘market fundamentalism’, neoliberalism has tended to involve: privatising key areas of the economy; reductions in state spending and the general role of the state; de-regulation of the financial sector and of corporate activities (relying on voluntary ‘corporate social responsibility’); strong promotion of foreign investment with few barriers, often accompanied by cutting taxes, promoting tax incentives for foreign investors; and failing to address rising inequality. Some of these policies are beginning to change, given the obvious failures of this model, but its general thrust is often still in evidence in the economic policies and aid strategies (not to mention domestic policies) of Western states such as the UK and the US.

Countries which have successfully developed in the postwar world do not owe their progress to neoliberalism. It is more accurate to say that the kinds of policies promoted by relatively successful states have generally tended to involve the opposite: a strong, interventionist role for the state; privileging domestic over foreign investors; liberalising only once the domestic economy and local firms can compete in world markets; periods of trade protection; and explicitly pro-poor state spending.

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Categories: Companies, Food & Agriculture, Health, Other, Tax, Trade, UK

The Alternatives: Approaches Towards a Life in Full

Report for Health Poverty Action (April 2018)

This research collates some of the evidence of alternative approaches to market fundamentalism, or neoliberalism, from a range of countries which have – to varying extents – successfully promoted inclusive development or indeed, alternatives to Western ideas of development itself. They include South Korea, Cuba, Mauritius, Ecuador and the Nordic countries. The report analyses the economic and other policies that have been used by these governments to improve health and reduce poverty. It shows that market fundamentalism is a political choice and that the poverty, poor health and inequality it creates are not natural phenomena. There are a range of alternative policies that have contributed to improving people’s wellbeing and health and reduced poverty. Although there is no one size fits all, there is an urgent need to challenge those promoting market fundamentalism and look to these alternatives

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Categories: Companies, Health, Tax, Trade

Making Tax Work for Girls’ Education: How and why governments can reduce tax incentives to invest more in girls’ education

Report for ActionAid (February 2018)

This report presents new research in four developing countries – Malawi, Mozambique, Nepal and Tanzania – and shows: How much revenue these governments are losing to tax incentives, including from the tax treaties they have signed with other countries; What it would cost these countries to provide all girls with full access to primary education, and; How much this investment in girls’ education would benefit not only the girls themselves but the economy as a whole.

The research finds that:

Three of the four countries are losing more than half a billion dollars a year to tax incentives
The costs of educating all girls currently out of primary school is miniscule by comparison. Tanzania, for example, loses 15 times more in tax incentives each year than it would cost to educate all girls currently out of primary school
Two countries, Mozambique and Nepal, would gain more than $1 billion by educating all girls currently out of primary school over their 45 year working lives.

There are 61 million children of primary school age around the world who are out of school – most of whom are girls. To ensure that all girls have a good quality education, governments in developing countries need to increase their spending on education and improve its quality. One key way to raise extra resources is by increasing tax revenues, and one major way to do that is to reduce or eliminate the tax incentives that many governments now offer, especially to corporations.

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Categories: Education, Tax

Open Letter from Catholic Bishops to mining companies in South Africa urging greater transparency in their use of tax havens

29 November 2017

The Southern African Catholics Bishops Conference (SACBC) has today written an open letter to 21 mining companies operating in South Africa asking each to explain why it is using tax havens. New research conducted for the SACBC shows that these 21 companies, which include some of the largest in the country, such as Anglo American, AngloGold Ashanti, Impala Platinum, LonMin and Petra Diamonds, all have subsidiaries in tax havens, also known as secrecy jurisdictions: these include the British Virgin Islands, Cayman Islands, Mauritius, Jersey, the Netherlands and Bermuda. The 21 companies collectively have 117 subsidiaries in such tax havens.

Open letter is here

Media release is here

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Categories: Companies, Mining, Tax, UK

Increasing Global Education Financing: Bold and Credible Pledges to Achieve Sustainable Change

Briefing for Global Campaign for Education (June 2017, published online October 2017)

Developing country governments have committed to ensuring inclusive and equitable quality education and lifelong learning for all by 2030, but to achieve this requires greater education spending: to at least 4-6% of GDP and 15-20% of national total budgets. Currently, low-income countries allocate an average of 16.7% of their national budgets to education (Sub-Saharan Africa 16.6%; South Asia 15.3%). UNESCO estimates that government spending on education by low-income countries will need to increase by 50% as a share of GDP by 2030. Governments can and must increase resources allocated to education, and ensure that this funding is spent equitably and effectively to secure the right to free, quality education. This briefing analyses why and how they should do this. Domestic resources to finance this extra education spending can be found. In particular, developing countries should expand their tax bases in progressive ways to ensure that they are raising at least 20% of their GDP in tax revenues. Currently, low-income countries raise on average around 16%, compared to around 33% in OECD countries.

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Categories: Aid, Education, Tax

Missed Opportunity: How could funds lost to tax incentives in Africa be used to fill the education finance gap?

Policy brief for ActionAid (August 2017)

How much revenue do African governments lose from providing tax incentives, such as giving companies tax holidays and exemptions on paying taxes on import duties and value added tax? And if these precious national budget resources were set aside to fund quality, public education instead, how much greater could education spending be? This brief provides figures for revenue losses from tax incentives for several African countries. It concludes that governments in sub-Saharan Africa may be losing US$38.6 billion a year, or 2.4% of their GDP, to tax incentives. This is equivalent to nearly half (47%) of their current education spending. Having a much clearer pro-poor policy for granting incentives and using some of these resources to fund education could provide a much-needed and significant boost to education budgets across Africa.

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Categories: Education, Tax

Lost Revenues in Low Income Countries

Report with Dr Bernadette O’Hare (July 2017)

This research estimates how much revenue six low income countries – of which five are in sub Saharan Africa – are losing unnecessarily from various potential revenue streams that could be used to fund public services. Developing countries can lose revenue in a variety of ways. Here we estimate how much is being lost from the following sources:
Tax avoidance by multinational companies; Providing tax incentives (for example, reductions or exemptions from the payment of corporate taxes) which constitute government ‘tax expenditure’; Not collecting taxes from a proportion of business activity in the informal sector; Corruption in the national budget; and Debt interest payments to international creditors. The research finds that revenue losses are large in all countries, which has significant implications for development. The priorities for low income countries are to end corporate tax avoidance, reduce corruption and raise tax collections. These areas are far more important than aid inflows: The six countries under analysis are losing 6.4% – 12.9% of their GDP; In most cases, this amounts to more than the combined national health and education budgets, meaning that expenditure on these areas could more than double; Revenue losses are larger than aid in two of the six countries and over 60% of the amount of aid in a further three.

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Categories: Aid, Companies, Education, Health, Mining, Tax

Making Tax Vanish: A tax investigation into RB

Report for Oxfam (July 2017)

Curtis Research provided research for this Oxfam investigation into British consumer goods multinational, RB (Reckitt Benckiser). Big business is able to take advantage of loopholes in global tax laws and avoid tax on a massive scale. This deprives governments around the world of the money they need to tackle poverty and inequality. It means there is less for them to invest in healthcare, education and jobs. This report examines the failings of the global tax system that facilitate mass tax avoidance. It looks at one example of a multinational company that Oxfam thinks is not paying its fair share. It calls on governments and business to implement the reforms that are needed to stop MNCs from avoiding paying their fair share of tax in the future.

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Categories: Tax

Honest Accounts 2017: How the world profits from Africa’s wealth

Report for group of NGOs led by Global Justice Now, Jubilee Debt Coalition & Health Poverty Action (May 2017)

Research for this report calculates the movement of financial resources into and out of Africa and some key costs imposed on Africa by the rest of the world. We find that the countries of Africa are collectively net creditors to the rest of the world, to the tune of $41.3 billion in 2015. Thus much more wealth is leaving the world’s most impoverished continent than is entering it. African countries received $161.6 billion in 2015 – mainly in loans, personal remittances and aid in the form of grants. Yet $203 billion was taken from Africa, either directly – mainly through corporations repatriating profits and by illegally moving money out of the continent – or by costs imposed by the rest of the world through climate change.

African countries receive around $19 billion in aid in the form of grants but over three times that much ($68 billion) is taken out in capital flight, mainly by multinational companies deliberately misreporting the value of their imports or exports to reduce tax.
While Africans receive $31 billion in personal remittances from overseas, multinational companies operating on the continent repatriate a similar amount ($32 billion) in profits to their home countries each year.
African governments received $32.8 billion in loans in 2015 but paid $18 billion in debt interest and principal payments, with the overall level of debt rising rapidly.
An estimated $29 billion a year is being stolen from Africa in illegal logging, fishing and the trade in wildlife/plants.

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Categories: Aid, Companies, Mining, Tax, Trade

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