The past week’s revelations through the “Pandora Papers” – the largest exposé to-date of how global politicians, business leaders, celebrities, and multinational companies use and abuse the “offshore” financial system – are both shocking and surprisingly familiar.
Following last month’s historic agreement on a 15 percent global minimum tax rate at the G7 Finance Ministers meeting, a groundbreaking 130 countries came together to support the Organization for Economic Cooperation and Development (OECD)’s Inclusive Framework, in another sign of accelerating progress on global taxation reform.
After months of anticipation, Rep. Cynthia Axne (D-IA) and Sen. Chris Van Hollen (D-MD) unveiled the Disclosure of Tax Havens and Offshoring Act last week to a chorus of civil society, small business, and investor support.
Over the past month, there has been an unprecedented global focus on corporate tax loopholes and profit shifting amidst reporting that at least 55 of America’s largest corporations paid no federal corporate income taxes at all in 2020. Since the dawn of civil society campaigning for international tax justice, this may be the closest activists have come to ending the era of tax havens and massive tax avoidance and it is increasingly clear to many lawmakers that corporations need to pay their fair share to help pay for COVID recovery programs, infrastructure, and other needs.
These past few weeks have seen “explosive” momentum in the movement for tax transparency. The United Nations High-Level Panel on International Financial Accountability, Transparency and Integrity for Achieving the 2030 Agenda (FACTI Panel) published their report in late February, recommending a broad slate of much-needed global reforms including public country-by-country reporting (PCbCR) of taxes and other financial information by multinational companies. This year, the Global Reporting Initiative put into effect the first global voluntary standard on public country-by-country tax reporting. The standard, known as GRI 207, has already attracted early support from Philips, Orsted, Alliance, and Newmont.
In February, FACT member Transparency international released a report outlining perceived corruption globally. Adding to a troubling trend over the last few years, the U.S. again fell in its ranking with its lowest score since 2012.