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It is time to act on the Panama disclosures

31 March 2017

One year on, much remains to be done to combat corporate tax-dodging, says David Haslam

THE publication of the Panama Papers, a year ago this week, showed that tax avoidance and evasion were widespread in the global economy (News, 8 April 2016).

Comprising more than 11 million files leaked from the Panamanian law firm Mossack Fonseca, the Papers revealed detailed information on 240,000 offshore entities. The leak demonstrated the deeply damaging effects of money-laundering — on, among other things, London property prices.

For the anniversary, the Global Alliance for Tax Justice is organising Global Tax Action Week. Starting tomorrow, it seeks to draw international attention to the growing inequality that tax avoidance and evasion cause. Only an effective global tax system can tackle this.

The Tax Justice Network, which helped to form the Global Alliance, and the Methodist Tax Justice Network, which works across denominations to persuade churches to see tax as a mission imperative, will be closely involved.

The two groups have invited Raphaël Halet to London. He is one of the “Luxleaks” whistle-blowers who leaked documents exposing favourable tax arrangements offered by Luxembourg to multinational companies.

After a trial in Luxembourg last summer, he received a suspended sentence and a €1000 fine, which was reduced on appeal this month, although he still has a criminal record. He will be presented with a Tax Transparency Award.


THE moral case for tax justice is clear: without proper taxation, public services such as education, health, social care, and security cannot be provided. If transnational corporations paid tax in the countries where they did business instead of exporting their profits by various means to tax havens, and if wealthy individuals were prevented from hiding untaxed assets offshore, the world could soon be a fairer place.

Recent research published by the Tax Justice Network estimates that $500 billion is lost every year through profit-shifting by transnational companies. The Network believes that the United Nations Tax Committee should play a far more influential part in establishing global tax policy, since it represents all members of the UN rather than just the wealthy nations behind the OECD.

Progress is being made in the UK and internationally. The Tax Justice Network and aid agencies such as Christian Aid, Oxfam, and Action Aid have, for example, gained increasing influence on UK tax policy. The organisations have lobbied successfully to ensure that the Criminal Finances Bill, now making its way through Parliament, includes clauses on tax avoidance.

Meanwhile, the G20 finance ministers said, in a communiqué this month, that they “look forward to the OECD’s preparation of a list by the [G20] Leaders Summit in July 2017 of those jurisdictions that have not yet sufficiently progressed towards a satisfactory level of implementation of the agreed international standards on tax transparency”. This indicated a willingness to name and shame jurisdictions that enable tax-dodging.

But much more needs to be done. Pressure must continue to be put on the OECD, which contains some of the most notorious tax havens, including the UK, Luxembourg, and the Netherlands. The UK is also responsible, Oxfam says, for four of the worst 15 offshore centres, including Bermuda and the Cayman Islands.


CHURCH investment bodies talk a good game on corporate tax, but there is little evidence that they are taking enough action to put pressure on companies in which they have holdings.

The Church Investors Group (CIG), which brings together a range of bodies and charities, including the Church Commissioners and church pension boards, has published guidance; and, in 2013, the Church of England’s Ethical Investment Advisory Group issued a corporate-tax “engagement policy”, which recommended that “tax ethics should be a subject for investor engagement where it appears that a company’s approach is blatantly aggressive or abusive.”

Despite such strong rhetoric, however, I am not aware of C of E investment bodies’ engaging in shareholder action over tax as they have over executive pay and fossil fuels.

One reason might be the complexity of tax arrangements. As Bill Seddon, the recently retired Chief Executive of the Methodist Central Finance Board and Chair of the CIG, commented last year at a Methodist Conference meeting on tax justice: “It is extraordinarily difficult to know the facts when it comes to tax.”

This may be true, but it does not provide ethical investors with an excuse not to apply vigorous pressure to companies on this issue.

It would help if church leaders spoke more clearly of the need for tax justice. For example, the Archbishop of Canterbury’s Lent Book, Dethroning Mammon (News, 2 December; Books, 3 February), acknowledges what tax can do to “enable the state to ensure the dignity, safety, health and education of all”, but fails to call for an end to tax havens or for the much-needed global tax system.

The Archbishop recalls being asked, when he was group treasurer of Enterprise Oil, “What is a Christian treasurer?” Surely, part of the answer would be one who ensures that fair tax is paid, thus contributing to the integrity of the financial system.

Later in the book, he points to the raising of Lazarus as the key cause of the crucifixion. I beg to differ. To me, the crucial event was the overturning by Jesus of the Temple tables to attack the system of tax-cheating and exploitation on which the Temple elite depended for their safe and comfortable lifestyle.

We need a sharper analysis, which addresses structural sin and takes on those principalities and powers as Raphaël Halet did — an act for which he has suffered mentally, socially, and financially.

The Church must be prepared to pay the emotional and financial price of acting to create a truly just tax system.


The Revd David Haslam chairs the Methodist Tax Justice Network. His memoirs, A Luta Continua, were published recently by Resource Publications (Books, 10 March).

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