politics | (no subject)

Via

eccentricyoruba:

Africa losing billions in tax evasion by corporations.

Billions are being lost, not collected in taxes due to corporate tax evasion throughout Africa. A Study by a Swedish agency, Forum Syd suggests that Money taken illegally from the developing world is worth 10 times annual global aid budgets, according to a recent study.Tax evasions by multinational companies in Africa is so vast that tax analysts believe that if the money were paid, most of the continent would be “developed” by now. But, lacking a sophisticated tax code, or the people qualified to enforce tax laws, many African countries continue to lose money that could solve most of its financial problems.

[...]

This all goes back to weak governing, the state not having competent officials to handle the work in enforcing the tax laws. Just blaming corporations shouldn’t be enough. Some blame has to be directed toward government officials who in many cases allow this to take place. We all know that nothing talks louder than money and bribery is common towards government officials.

The article talk about weak governing, but corps are the big evaders here. So I guess we should put the blame on them. There is some talk about "modernizing tax codes for a globalized world" that kinda makes me cynical, specially when corruption has a lot to do here. But to be honest, I have no idea what he proposes because I'm not familiarized with how "tax codes" work in these different places. The proposal of a "business friendly environment" when talking about taxes evasion... is weird.

Flat | Top-Level Comments Only

I think it's safe to say that the global community will make its move against big business by making everything taxable everywhere without exception. It will take awhile to get there. More and more governments are becoming painfully aware of just how much taxes are being dodged.

Bribery and corruption create an opaque atmosphere where nobody knows why decisions are being taken, and for many businesses, this creates a business-unfriendly environment. One cannot conduct normal business in places where you are subject to kidnapping and extortion; however, those larger companies who do go to such places assume a certain amount of annual deaths and personal risk to their employees, and send them anyway. Develop relations with subcontractors willing to take those risks, for example. Develop various kinds of distancing tools to deny that they are exploiting such chaos. Conflict mineral suppliers are daily redirecting rare earth metals from war zones in the Congo elsewhere so they can claim these are all perfectly innocent suppliers for computers and cell phone assembly. So much money is involved that everybody turns a blind eye to the genocide, sexual violence and child slavery (yes, that is he correct term) used by guerrilla operators in those areas of Congo. Apparently this was actively encouraged by Western companies--as I understand it, purely because those methods were *cheaper*, even though the increasing chaos there has finally begun causing uncertainty in the assembly of such components.
One could argue similarly on the societal uncertainties in the drug war murders in Mexico. That's got bad enough that cruiselines have simply stopped entering certain ports there, it's simply no longer worth the risk to their tourists. Has that stopped the murders in those towns? How long can these kinds of issues be ignored?
The question becomes when larger groups, such as multinational banks and those intertwined governments concerned about economic uncertainties, will have both the political will and power to enforce rules about things like campaign finance reform, transparency in contracts, protection of whistleblowers, and other hallmarks of larger interconnected economic systems.
In the meantime, smaller isolated economic cells will continue to get exploited. All you need are the right kinds of tongs, in several senses of that word.

"Tax codes" in strongman-ruled countries, juntas, and dictatorships usually involves bribing the tax official with a small amount of money compared to the profits obtained by that company when the official looks the other way.

For multinationals, a "business-friendly environment" usually means making the tax laws so that the multinationals pay as little to nothing as possible while they make big profits.

Or that's my cynicism showing, but it's usually a pretty good rule of thumb when it comes to those corporations, from what I've seen.