“The first condition of understanding a foreign country is to smell it.”
In June this year, TJN-A’s Policy Lead on Tax and International Financial Architecture, Crystal Simeoni, spent a week in London on a tax tour hosted by TJN-A- Christian Aid. This post is on her experience.
Early this year, Christian Aid hosted a small group of civil society representatives from across the world with the aim of strengthening the development focus of the tax justice cause in the UK. It involved a number of speaking engagements to share the African experience in the fight for Tax Justice. There is an increasing need to influence British decision-makers on tax transparency and to build a movement of tax campaigners in order to bring about a fairer global tax system that contributes to a more equitable world.
It was a great opportunity to experience first-hand and learn about the tax justice movement and campaigns around the issue from a UK perspective. It was also a chance for me to meet religious leaders, media practitioners and advocacy allies of Christian Aid and give them an insight into an African perspective of tax justice. I realised that though we are all walking the same path, we are just at different points of the journey and chances to meet and share struggles and lessons outside of conference rooms are few and far between.
In terms of entry points, one area of engagement was on public country by country reporting. Advocacy groups in the UK have been working with parliamentarians to amend the Finance Bill which will require Britain’s largest multinational companies to make public their reports on activities, profits and taxes in each country that they operate. Public country by country reporting is a tool that can be used to analyse the tax practices of large multinational corporations for accountability purposes. From an African perspective, ensuring that the UK enforces public country by country reporting means that our countries have access to vital information that helps them paint a full picture of what these multinationals are doing in their countries comparatively. By extension, it means they are able to use this information to ensure that these multinationals are paying their fair share of tax which can in turn contribute to funding essential social services such as hospitals, schools as well as contribute to ensuring infrastructural progress for increased investments. The proposed amendments call for the reports to be public rather than accessible just upon request.
My trip to London happened just after the conclusion of the Anti – Corruption Summit had a few weeks earlier and subsequently transparency was also an engagement point while I was there. The Summit will be famously remembered from the former British Prime Minister, David Cameron’s remarks as he spoke about leaders present at the summit: “We’ve got some leaders of some fantastically corrupt countries coming to Britain… Nigeria and Afghanistan, possibly the two most corrupt countries in the world,”
In light of this, conversations from an African perspective on corruption were important. The Panama papers worked to shift the narrative that the problem is one of just corrupt African governments. The Panama Papers began to demonstrate the web of complexity involved and strengthened the notion that the root problem is weak global financial systems. Corruption has a part to play, but it does not happen in a silo devoid of other factors and blame lies with more cohorts of people across the world. Subsequently, my trip involved a number of conversations around the need for greater transparency and a very clear pain point in this process was the push for public registers of beneficial ownership in the UK’s overseas territories and Crown Dependencies.
The week also saw the exit of Britain from the European Union in what is commonly referred to as the Brexit vote. In the midst of all the uncertainty accompanying the UK’s exit, the biggest challenge for tax justice campaigners “Tax Haven UK”. The UK has the lowest level of corporation tax in the G7 group of countries and has been seen to be always undercutting the rest of Europe. A large number of international corporations have major offices in the UK serving the rest of Europe. With Brexit, there is a risk that these organisations will move their operations elsewhere. In a bid to retain them, the UK may make some bold moves, making the threat of lowering the corporate tax fee even lower into reality. The phenomenon of “the Race to The Bottom” that Africa has been fighting is suddenly knocking on British doors.
As an African I can’t help but wonder what happens with trade between our continent and the UK. The Brexit vote essentially means that all the trade deals will have to be renegotiated which could take a long time, leaving us in trade limbo. The trade issue will get clearer with time, however for the next few months, there will still be a lot of uncertainty.
Fighting to curb illicit financial flows based in Africa, we sometimes get caught up in our little bubble and going to London showed me how we may be fighting the same fight, but our prisms may be slightly different. Our challenge here may be creating awareness around what country by country reporting is – their challenge is pushing for “public” country by country reporting. There is still a lot that we need to share and cross pollinate – and who knows, maybe we may need to send an expert or two on the race to the bottom campaign over to the UK in the coming months.
This trip to London ties in with the work TJN-A is doing along the same lines with an African focus. In terms of building the capacity of different constituents on tax justice issues, we will be having our annual International Tax Justice Academy this September. We will also be having the Pan African Conference which is scheduled for October 2016. The conference is a platform to take stock of work on tax justice on the African continent – a place we can all share lessons and work on synergising efforts as we continue in the struggle.
Christian Aid has been a long-time ally of Tax Justice Network – Africa and although their mandate is much broader than just tax justice, our values align. Christian Aid as an international non-governmental organisation insists “the world can and must be swiftly changed to one where everyone can live a full life, free from poverty”. As such they have a strong thematic focus on tax justice. At TJN-A, we advocate for tax policies with pro-poor outcomes and tax systems that curb public resource leakages and enhance domestic resource mobilisation so we are both working towards the same goals.