Tax Justice Movement

In the 21st century, a host of organizations around the world have emerged to fight back against inequality and tax injustice, beginning by exposing the secrecy behind which tax evasion and corruption are hidden.

The Tax Justice Network, based in the United Kingdom, has taken the lead on systematic research and network building. It was formed in 2003, and in 2013 spun off the Global Alliance for Tax Justice , which represents hundreds of organizations in five regions: Africa, Latin America, Asia, North America and Europe. The tax justice movement is also strengthened by the research and campaigning of other transnational organizations, such as ActionAidGlobal Witness, the International Consortium of Investigative Journalists, Public Services International, and Transparency International.

Founded in 2007 during the World Social Forum in Nairobi, the Tax Justice Network Africa (TJNA) is one of the most active and most effective regional networks, working both with civil society and with multilateral agencies such as the UN Economic Commission for Africa (UNECA).  It works at a continental level and with partners in individual African countries, as well as playing an active role in global leadership on tax issues.

African groups have particularly highlighted the enormous drain of resources from the African continent through illicit financial flows (IFFs). Illicit financial flows include both illegal and illegitimate flows of financial assets across borders, whether due to criminal activity or to tax abuse through loopholes and hiding of assets.

In 2015 the UNECA released the report of the High-Level Panel on Illicit Financial Flows from Africa (Mbeki Report), which served to accelerate attention to the issue both in Africa and globally. The TJNA also serves as the secretariat for the Pan African civil society campaign Stop the Bleeding Africa. Recent updates on TJNA work in African countries is available on its blog.

In the United States, the Financial Accountability and Corporate Transparency (FACT) Coalition , the U.S. regional affiliate of the Global Alliance for Tax Justice, achieved a major victory in December 2020, after more than a decade of legislative work, when Congress passed a bill to outlaw anonymous shell companies and require all companies to file statements of their true beneficial owners to law enforcement authorities . This advances one of the two highest priorities for corporate transparency, the other being a needed requirement for country-by-country reporting by multinational corporations.

In the United States, however, national legislation is only the starting point. Implementation depends not only on action by multiple federal agencies but also by states and localities to enforce compliance by both corporations and individual taxpayers with transparency requirements. If a law is on the books, and violations are not exposed and punished, the law will be ineffective.

That is an agenda which has to be taken up by activists at local and state levels in order to ensure that corporations and the ultra-rich pay their fair shares at all levels. Transparent debates about public budgets must be matched by public debates about how to fund real public needs. For a recent example, note the ballot initiative that San Francisco voters approved by a margin of 65-35, to increase taxes on corporations with extreme gaps between CEO and worker pay.

Although any analogy is imperfect, both African countries and U.S. states and local jurisdictions face the common issue of finding resources to meet pressing needs. And in both cases, their options are hindered by systemic bias in the rules laid out by outside forces, from the federal government in the United States to multinational corporations and transnational financial institutions.

For additional background on tax justice and illicit financial flows, check out the following links:

Regularly updated articles in AfricaFocus Bulletin

Credit: Jemal Countess, on assignment for Ethiopia Reads

In the 21st century, a host of organizations around the world have emerged to fight back against inequality and tax injustice, beginning by exposing the secrecy behind which tax evasion and corruption are hidden.

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