Who is using tax havens and who is working to close the loopholes?

Image: 401kcalculator.org/flickr

The use of tax havens by Canadian firms has been growing since the 1990s. In 2012, Canadian progressive economist Toby Sanger produced groundbreaking research which started analyzing how much Canadian investment abroad was going into tax havens. Due to the Paradise papers leak,  analysts have updated their estimates. Canadians for Tax Fairness reports that analysts now believe over $500 billion in tax revenue is lost globally due to corporate tax dodging using tax havens. Canadians for Tax Fairness has revised its estimate of Canadian tax losses due to tax havens to between $10 to $15 billion a year -- up from their previous estimate of $5 to $8 billion a year. Over 3000 canadians were part of the Paradise Papers leak, 350 or so Canadians were a part of the Panama papers leak (85 of them are being investigated by the Canadian Revenue Agency) and this is the tip of the iceberg. This an unfathomable amount of money which is being stolen from public coffers by the same people who tell us that there is not enough money to improve benefits for workers, or to pay for public services.

Tools to find out who is mentioned in the leaks 

The most exhaustive tool is the database of offshore leak documents complied by the International Consortium of Investigative Journalists.  Right now they are in the midst of adding the Paradise Papers to the database. If you are bargaining or organizing or working on any campaign, search this database. Make sure you have done your research to know the key people and all the company operating names and subsidiaries so you can plug them into the database. Companies like Apple worked hard to make sure that the money is difficult to trace back to them, so strategic research is important. 

Meanwhile, here are some names of politicians named in the Paradise Papers compiled by Press Progress and well known Canadians compiled by the CBC. It is time to start writing to them to demand that they pay their fair share and to expose their hypocrisy the next time they demand cuts for the rich.

Who is demanding change?    

The Canadian Revenue Agency has been slow to start measuring the tax gap and regulate tax havens but some changes are finally happening. After pressure from the Panama Papers and Senator Percy Downe, Revenue Minister Diane Lebouthillier sent a letter to Downe saying that her department will try to estimate the value of Canada's so-called "tax gap," the difference between what is owed in taxes and what is actually collected.  

Measuring the tax gap is the beginning. The Conservative government amended the tax rules to allow Canadian companies to use tax havens and bring the money back into Canada, paying almost no taxes. These changes have to be undone. Finance Minister Bill Morneau's former company has a subsidiary in the Bahamas which benefited from these rules. Since 2009, Canada has signed 23 tax information exchange agreements, or TIEAs, with tax havens from Aruba to Turks and Caicos and many Canadian companies have been using them.

The Tax Justice Network provides a lot of useful information about global tax dodging and similar issues. Their fact sheet, which summarizes available data on the tax havens, provides comprehensive information about the global scale of tax havens. The Canadians for Tax Fairness and Le Réseau pour la justice fiscale Québec (RJFQC) are key Canadian organizations demanding reforms to close these loopholes. Work with them and support their work. 

Image: 401kcalculator.org/flickr

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