|Tax Justice Network was also in the Global Tax 50 2014and2012|
The Tax Justice Network (TJN) is a campaigning body that advocates fairer tax policies around the globe, particularly to benefit developing countries.
Global tax transparency advances in 2016 have been influenced by TJN's efforts and some of its biggest campaigns to date have earned it a place in the Global Tax 50.
Established in 2003 and now in its 13th year, TJN carries out research and analysis of international tax policies and financial regulations with the intention to "change the weather" on a wide range of issues related to tax, tax havens and financial globalisation.
During 2016, TJN has been pushing for greater transparency of beneficial ownership registers to prevent companies and individuals from using tax havens to hide untaxed assets.
However, one of TJN's proudest successes over the past year has been raising awareness of how tax secrecy impedes the human rights of individuals in some of the world's poorest nations.
Together with human rights lawyers and partners at the Centre of Economic Justice and Social Rights, a leading human rights group in New York, and others, TJN successfully requested that Switzerland and its tax secrecy behaviour be scrutinised as part of the four-year review of human rights commitments conducted by the United Nations.
Tax Justice Network's argument that Switzerland's secrecy laws undermine the ability of other countries to meet their human rights commitments, especially in respect of women, was accepted and, for the first time ever, a country was reviewed on the basis that its tax laws undermine the ability of other countries to meet basic human needs.
"All human rights have costs and every single human rights commitment signed up to by a country includes an obligation to maximise resources to fund that commitment. When countries allow individuals to hide looted assets and evade tax behind secretive offshore structures, or when companies avoid paying tax, they are depriving countries of the resources they need to fulfil their human rights obligations," John Christensen, the director of TJN, told International Tax Review.
"We chose this as the first case because Switzerland tops our financial secrecy index. It also hosts the office of the commissioner of human rights", Christensen added.
In November, Switzerland received strong recommendations from the UN Committee mandated to oversee compliance with the Convention on the Elimination of All Forms of Discrimination Against Women (CEDAW) to examine the impacts of its secrecy laws on third party countries.
Switzerland, which has responded to the review, has accepted in principle that there are issues around its transparency laws.
"As pressure mounts for a UN General Assembly resolution to stamp out tax havens, it has become clear that governments who insist on eroding the tax bases of other nations will face increasing scrutiny from human rights accountability mechanisms," TJN said in a blog post. "The ground-breaking outcomes of CEDAW's review of Switzerland indicate what can be achieved when human rights and tax justice advocates join forces to use these mechanisms to challenge cross-border tax abuse as a violation of human rights."
"Think about where this might take us," Christensen said. "For a long time companies have been taking aggressive tax positions – particularly in some of the most vulnerable and impoverished countries. Tax avoidance is often justified by spurious arguments about fiduciary duties to protect shareholder interests. But let's flip that argument onto its head and say actually you are violating human rights, or rather you are undermining the ability of the countries that host your activities to fulfil their human rights obligations. That's a much stronger position."
Making governments and companies change their tax practices through raising awareness of the affect it has on human rights is a powerful force for change, according to Christensen. "Firstly, at the country level, we can bring pressure on countries, like Switzerland, to start considering, in a very technical way, the spillover impacts that their tax policies and their secrecy policies have on other countries", he said. "At the same time, at a company level, we can raise concerns that a company, adopting a particular position, is not just infringing on corporate social responsibility or moral issues, they are actively and knowingly harming the social and economic development of people in other countries."
"I'm hoping that Switzerland will remedy some of the problems. Specifically, we would like to see Switzerland extend automatic information exchange under the new common reporting standard to all developing countries," Christensen continued. "In other words, make it a truly global commitment, rather than being selective about which countries it is prepared to share tax information with: a simple ask. And that's so patently a fair thing to do. Fair in terms of Switzerland improving its reputation, but also fair in terms of helping developing countries move beyond aid and debt dependence into having tax systems that actually fund their own."
But for TJN and fellow tax justice campaigners, there is still more to do.
In coming years TJN and its partners will be requesting that the UN reviews the human rights track records of more countries – including the UK and US – to spotlight how their secrecy laws and practices impact on other countries.
Separately, Christensen said that he looks forward to identifying mining companies doing egregious things in some of the most vulnerable countries of the world, and investigating them and the way they are deliberately disrupting things, and violating human rights.
"We are always trying to push into new areas," Christensen said. "We describe ourselves as 'weather changing', and I do think that the weather has changed significantly around tax avoidance. We are seeing that in the corporate community itself, which is precisely the community where change is most needed."
Over the next few years, TJN will be focusing on the need for change at the political level and raising the debate on "tax wars", that is the recent tax competition to drive a short-term change to attract investment. TJN will be looking at the "race to the bottom" on tax rates and how so-called tax competition harms development in both developed and developing countries.
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