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	Tax abuse leads to human rights abuse by CESR, UC Berkeley, agencies   July 2018   Tax abuse leads to human rights abuse: IMF confirms U.S. corporate tax changes are likely to intensify public resource scarcity overseas, writes Niko Lusiani, Director of the Center for Economic and Social Rights.   A specter is haunting governments around the world—one emanating from the fiscal decisions of the U.S. Congress and White House. Yet, no one in Washington, D.C. seems to be talking about it. Well, almost no one.   Earlier this month, researchers at the International Monetary Fund (IMF) released their initial findings on how the recent changes to the U.S. corporate tax system may affect the revenue base of other countries around the world. They found that the fallouts of the Republican-enacted Tax Cuts and Jobs Act (TCJA) could deplete - on average across all countries - over 13 percent of tax revenues previously received from multinationals.   Corporate tax dodging hurts people of modest means the most   Why is this important? Governments everywhere rely on companies to pay their fair share of taxes which is then invested in public goods and services essential to human rights like primary education, free elections, health coverage and access to justice.   Yet, multinational companies in particular often skirt these responsibilities, manipulating taxes in ways which systematically deprive countries — especially poorer countries that rely more heavily on corporate income tax—from much needed revenue.   According to recent estimates by economist Gabriel Zucman and colleagues, close to 40% of multinational profits, worth a whopping $600 billion globally, are artificially shifted to tax havens and other low-tax countries each year.   The dirty little secret of globalization is that multinationals have learned how to book their profits (which they pay taxes on) almost anywhere, without needing much to move their actual operations (which they pay less tax on). While the study shows that developing countries and non-tax haven European Union countries are the prime losers, corporate tax dodging ends up hurting all governments by shrinking corporate income tax payments globally.   Indeed, some six months in from the biggest “America First” tax cut in 30 years in the United States, corporate tax receipts are at their lowest point in 75 years and the only boost has been to the owners of America’s “shareholder first” economy.   That is to say on net, globally, corporate tax dodging is a transfer from people of modest means who rely on tax-funded public services to the private hands of wealthy company executives and their stockholders.   It’s no coincidence then that under the pretext of resource scarcity, governments around the world have turned to austerity measures over the past decade. While the specific choice of fiscal consolidation measures has differed across countries, the results have been common: deepening poverty, mounting inequality and accumulating discrimination.   And a big reason for this Lost Decade for human rights has been the breakdown in governments’ ability to properly tax multinational corporations: perhaps most vividly illustrated by the TCJA.   U.S. corporate tax cut hinders other governments from investing in human rights   Over the last year, we at CESR raised concerns about how changes to the U.S. corporate tax rate and rules would deepen inequality within the country, also creating a global ripple effect jeopardizing human rights abroad. Axing the corporate income tax rates from 35% to 21% while amping up various tax privileges in an economy as large as the US inevitably leads to a “spillover effect” on how multinationals’ choose where to place their profits and investments.   It also encourages other governments to lower the effective tax rate of multinationals operating in their country. The UN Special Rapporteur on Poverty agreed, concluding in his official mission to the United States that “the tax cuts will fuel a global race to the bottom, thus further reducing the revenues needed by Governments to ensure basic social protection and meet their human rights obligations.”   Now half a year since the passage of the TCJA, IMF researchers have put initial numbers to these losses in a new working paper. Conservatively, across all countries, the spillover effects of the U.S. corporate tax changes could drain an average of 5 to 13.5 percent of the tax revenue they previously received from multinationals. What’s more, the harm is not evenly distributed across countries. Mexico, for example, with high trade exposure to the United States, could lose over 30 percent of its already-dwindling multinational tax revenue because of the TCJA.   The IMF researchers quantify the likely spillover impacts of the tax rate cut on the profit shifting and location decisions of multinationals, as well as on the foreseeable decisions by other governments to cut corporate tax rates. They take pains to clarify that their models are tentative as they were unable to capture the TCJA’s full impacts. Since a lack of reliable micro-data on multinationals artificially deflates estimates, spillover effects are likely to be higher in practice.   Yet, while the precise quantity of fiscal risks posed by the U.S. corporate tax cuts are presently unknowable, their direction is clear: the TCJA further impedes governments around the world from raising sufficient revenue to invest in human rights.   As the United States was a premiere “on-shore” tax haven even before this new legislation, the TCJA was a continuation of a trend which effectively restricts the fiscal space of countries—especially low and middle-income economies more reliant on corporate taxes—to choose their form of a social contract. To offset the decreased revenue, many governments around the world may well increase regressive consumption taxes while further depleting funds for public services and poverty reduction measures. In this way, the TCJA’s spillover effects could very well be borne by the poorest people in the world.   http://www.cesr.org/tax-abuse-leads-human-rights-abuse-imf-confirms-us-corporate-tax-changes-are-likely-intensify-public   June 2018   Paying tax where they make profit - it''s as simple as that for Apple, Google and co, writes Gabriel Zucman.   As we all know, technology multinationals do not pay a lot of taxes in Europe. Google, Facebook and Apple, among others, have specialised in fictitiously locating their operations in territories or countries where corporate taxes are low or even practically zero. In order to restrict these tax avoidance strategies, the European Commission has proposed taxing digital technology companies with a rate of 3 per cent of their revenues.   This plan was presented in Brussels by Pierre Moscovici, the EU Commissioner for Economic Affairs. However, even if this tax is ever implemented (which is far from certain at the moment, as Ireland, Luxembourg and Malta are opposing it with complete impunity), it is no more than a cover-up. The European Commission recognises this openly. In its opinion, it is only a provisional measure pending a reform of greater scope that has been in limbo since ... 1975.   Let’s recap. Due to financial globalisation, tax avoidance opportunities for large companies have multiplied. They are now making enormous profits in a handful of tax havens, headed by Ireland, Luxembourg, The Netherlands, Singapore, Hong Kong and Bermuda. Worldwide, more than 40 per cent of profits made by multinationals are artificially moved to these territories. That amounts to EUR 600 billion of profits made in France, The United States or in large emerging countries, but registered, and hence taxed (at near-zero levels), in those states offering advantageous tax rates.   This practice affects all sectors of the economy, from the pharmaceutical industry to the financial sector and from the automotive to the textile industry. We need to recognise that the giants of Silicon Valley have demonstrated great inventiveness in their set-ups. Google Alphabet, for example, registered almost USD 20 billion in profits in Bermuda in 2016. However, contrary to a widely held view, tax optimisation is not the prerogative of technology companies. That’s why the 3 per cent tax is nothing but a fig leaf. Even if it were passed, the underlying problem would persist.   Taxing where you make the profits   So, what to do? The most promising approach consists of changing the way taxable profits are calculated in every country. Concretely, we propose taking the overall profits of companies worldwide and redistributing them among states while using a system of formulary apportionment based on the value of sales realised in every country.   If Apple, for example, made 10 per cent of its total sales in Germany, 10 per cent of its overall profits would then be subject to taxing in Germany. With this approach, it would be impossible to make disproportionate profits in Ireland or Bermuda. Because even though companies can nowadays easily choose the location of their profits, they do not control the location of those of their clients, who cannot send them off to the Cayman Islands that easily.   This solution is specifically appropriate for digital companies. Continuing with the example of Apple in Germany, the Ministry of Finance knows exactly how much all the computers, phones, tablets and digital services sold on the domestic market are worth. The end clients of these multinationals are also well identified, as this information is used to apply VAT.   Introducing a system like this in the European Union has been debated for various decades. We are talking about the implementation of the so-called Common Consolidated Corporate Tax Base (CCCTB). For these same decades, Ireland, Luxembourg and the other tax havens in the EU have been opposing this system that would put a stop to their development strategy based on fiscal dumping.   But the opinion of the governments of tax havens is not binding. There is nothing stopping Germany, France and the other European countries from moving forward to adopt this reform unilaterally. These governments could demand that the companies that operate in their countries provide them with information about their overall profits and the sales realised in their territories, enough information to be able to calculate the taxes owed. Companies that refuse to provide these basic accounting numbers would then be denied access to the market in these countries.   Cooperation is always preferable, of course. But, does it make sense to wait until Ireland and Luxembourg change their minds? The political risk is real, because globalisation is not very likely to have a great future, if those who make the highest profits see their taxes go down while those who suffer the impacts of globalisation the most see theirs go up! The Trump vote in the United States or the Brexit vote in the United Kingdom can already be seen as a reaction to this situation. http://gabriel-zucman.eu/   http://www.project-syndicate.org/commentary/oecd-reducing-digital-multinationals-tax-avoidance-by-jose-antonio-ocampo-2019-01 http://www.icrict.com/press-release/2019/1/30/icrict-welcomes-oecd-decision-to-discuss-radical-solutions-to-end-multinationals-tax-avoidance http://www.icrict.com/icrict-in-thenews/2019/2/13/how-can-we-tax-footloose-multinationals   * The Exorbitant Tax Privilege, by Thomas Wright and Gabriel Zucman. An analysis of taxes paid by U.S. multinationals on their foreign profits since 1966: http://bit.ly/2Q1EDNG Visit the related web page
	Business profit or diverse food systems? by Right to Food and Nutrition, FIAN, GRAIN, agencies   In West Africa, more than 80% of the seed used by peasant communities stems from traditional species and varieties, and are selected, saved, used and exchanged according to customary practices. Despite guaranteeing diverse food systems and rural people’s rights, these traditional seed systems are under attack, as governments, corporations and development agencies proactively promote commercial seeds and intellectual property rights.   A new report launched today by the Global Network for the Right to Food and Nutrition and the Global Convergence of Land and Water Struggles – West Africa describes the mechanisms behind a forced transformation towards farming and food systems that serve the interests of business. Based on discussions with more than 400 peasants in Burkina Faso, the report shows the profound implications for the lives of peasant communities of the introduction of commercial seeds. These range from the loss of peasant varieties, over more external input-dependent farming models, to less diverse diets.   Commercial seeds, leading to dependency   “Peasant seed systems are based on communities’ knowledge as well as on species and varieties, which they have selected and constantly adapted to the environment over centuries,” says Rosalie Ouoba of the Burkina Faso Platform of the Global Convergence of Land and Water Struggles – West Africa. “For peasant communities, seeds are more than a ‘genetic material,’ but a part of the web of relationships that they entertain with nature. Some communities that were interviewed described seeds as the ‘soul of the peasant’.   Women, and elderly women in particular, play a crucial role in the conservation and selection of traditional varieties.” Because of their adaptability, peasant seeds are also a key element for communities’ responses to climate change, as rain patterns in the region become more irregular.   While peasant seed systems ensure peasants’ control over the entire cycle of seed production and use and, consequently, gives them a large measure of autonomy and independence, the commercial system engenders a need to buy seeds and inputs. This, combined with legal and/or technological restrictions on seed saving and use, mires the peasants in increasing dependency. In addition, peasants maintain an enormous diversity of species and varieties through their seed systems, which is the basis of rich and diverse food and nutrition.   Corporations are “dividing the pie”   The spectacular failure of GMO cotton in Burkina Faso sheds a light on the consequences of a production system that is dominated by some few companies and transforms peasant communities into passive recipients of seeds and agrochemicals, while their farming activities are restricted by exclusive, patent-protected rights. “The introduction of GMO cotton exacerbated the debt-cycle in which cotton growers find themselves at the bottom of a transnational value chain.   Their complete dependency on the national cotton companies and the agribusiness TNC Monsanto, let them no choice but to grow GMOs using the chemical package that is sold by the very same companies,” underlines FIAN International’s Natural Resources coordinator, Philip Seufert. Until today, no independent assessment has been made about the consequences of eight years of GMO cultivation.   “Peasants’ rights to seeds are guaranteed by international law, including the human rights framework and the International Treaty on Plant Genetic Resources for Food and Agriculture,” Seufert continues. “However, these rights are not being implemented and states have focused their efforts in harnessing the intellectual property regime, which limits peasant’s access to and use of seeds,” he adds.   Indeed, human rights obligations require states to recognize, protect and support peasant seed systems, preserve biodiversity and effectively protect people from the risks of biotechnology. However, current laws in West Africa leave the status of peasant seeds and their management in a grey-zone, which exposes them to biopiracy and confines them into so-called “informal” seed systems. At the same time, national and subregional policies promote the industrial production of commercial seeds and the establishment of a commercial seed sector.   Against these trends, social movements and peasants’ organizations are mobilizing to protect their seeds and advance their rights, through laws and policies that are based on agroecology and the right to food. Processes like the one towards a UN Declaration on the Right of Peasants and Other People Working in Rural Areas or the development of guidelines for the implementation of the International Treaty on Plant Genetic Resources for Food and Agriculture (ITPGRFA), provide important entry points. West Africa’s diversity of species and varieties is a treasure, which was developed and is kept by the region’s peasant communities, and whose importance stretches to all of humanity.   http://www.righttofoodandnutrition.org/business-profit-or-diverse-food-systems http://www.grain.org/article/entries/5851-trade-agreements-that-impact-seed-laws-in-africa http://www.oaklandinstitute.org/down-seed-world-bank-enabling-business-agriculture-corporate-takeover http://www.ipes-food.org/news http://www.srfood.org/en/seeds http://www.srfood.org/en/documents http://www.fian.org/en/news/newslist/ http://bit.ly/2KOPCHl http://bit.ly/2GHhTwM http://www.escr-net.org/collective-work http://www.ohchr.org/EN/Issues/Food/Pages/FoodIndex.aspx Visit the related web page
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