The campaign for tax justice in Brazil

In 2007 the Brazilian government proposed fundamental changes to its tax system. Reforms were aimed mainly at simplifying tax rules – eliminating certain taxes and bringing an end to the ‘tax war’ between Brazilian states – as well as a proposal to end the link between specific taxes and the exclusive financing of social policy initiatives. While the reform proposals were disappointing – given their complete failure to address equity issues – they also raised new concerns regarding the financing of the country’s health, welfare and social assistance programmes. Brazilian CSO INESC saw the reform proposal as a window of opportunity to campaign for progressive tax reform.They invited five CSOs to participate with them in one of the government’s public consultations on the reform. As other groups became interested, a network of more than 100 organisations was formed – the ‘Movement in Defence of the Social RightsThreatened by theTax Reform’.They developed their alternative proposal ‘for a just tax reform’, calling for equity to be built into the reform bill and for social policies to continue to receive exclusive financing. INESC along with five other organisations formed the executive committee of the network, with INESC providing the technical support and coordinating the lobbying.The network conducted lobby meetings with representatives from all political parties and managed to secure the support of a number of MPs. This enabled them to successfully push for a public debate inside the National Congress. Key allies included the trade unions and churches, as well as a group of academics and state health departments. (While the government claimed there would be no losses to social programmes, the Ministry of Health calculated it was likely to lose US$9 billion).The public attorney’s office also assisted the campaign with several official requests for information from the government. Although the campaign was…

French campaign to stop tax havens

A French campaign against tax havens was launched by a coalition of CSOs and trade unions in September 2009 ahead of the G20 Pittsburgh summit. Called ‘Stop tax havens’ they wanted to demonstrate that much of their economy was built on making use of tax havens via the investment decisions of banks, multinationals and hedge funds. This was an empowering message as it meant that citizens could contribute to ending tax haven secrecy by pressurising domestic companies to be more transparent about their activities. At a time of global economic instability and looming budget cuts, it was also important to show how both developed and developing country budgets lost out due to tax havens.Therefore there was a strong self-interest incentive for government action as well as a moral one: tackle tax havens and governments would gain more money! The campaign has a website so people know where to go to get information.They have clear policy recommendations and kick-started with a public petition that has so far collected 50,000 signatures.They identified four different stakeholders – citizens, trade unions, leaders of companies and local councils – and tailored messages and activities to each. In addition to signing the petition, hundreds of citizens have written to their banks to ask about their activities in tax havens. New technology has helped connect activists across France by using a ‘Google map’ that identifies other interested people in their area. Local authorities have been asked to get involved by requiring companies tendering for service contracts to present their accounting activities on a country-by-country basis.This approach has already been endorsed by eight French regions, and the capital Paris may be next on the list! All of these activities are designed to build up the pressure for change in advance of the G20 summit (which France will host)…

Tax hits the press in the Dominican Republic

The Centro de Estudios Sociales Padre Juan Montalvo, S.J. – or Centro Montalvo as it is commonly known in the Dominican Republic – has recently started working on tax. It has actively campaigned around the budget for many years, with a particular focus on education spending. Its decision to work on tax came in 2009 when it started a research project into the Dominican Republic’s tax system.This research laid bare the extremely low levels of tax collection in the country – 15 per cent of gross domestic product – and the regressive nature of the system which weighs heavily on the poor. Following its press release and launch event for this research in 2010, the organisation’s work was picked up by a variety of newspapers. It seems that an NGO speaking out on this controversial theme quickly gained a lot of media attention. In particular, the issue of the unfairness of the tax system was given a clear emphasis in the media reports. As a result of the coverage, several private sector representatives have approached Centro Montalvo to begin a dialogue on tax, expressing their openness to debate improvements to the tax system. Government representatives have also hinted at their openness to debate, given the country’s national targets for increasing tax collection.

Civil society engages with the EITI in Ghana

In Ghana, civil society has engaged with the issue of how best to use the resources generated by gold mining since the inception of Ghana’s Extractive Industries Transparency Initiative (EITI) in 2003 and has been seeking to extend that experience to the oil and gas sector. Opposition parties tend to be more open to critiques about what is happening with the revenues from natural resource extraction, as they can use this to challenge the government. As a strategy, civil society therefore worked with the then opposition party National Democratic Congress, to persuade it to commit itself in its manifesto to transparent and accountable governance of the country’s natural resource sector. After large quantities of oil were discovered in Ghana in 2007 (reportedly to generate at least US$1 billion in revenues per year for the next 20 years), a round-table meeting was organised to discuss the extension of EITI to the oil and gas sector.This brought divisions within civil society about whether and how to engage with EITI, because it was seen as donor driven and initiated by the UK Blair government rather than by Africans. However, the view of a number of CSOs was that while EITI was limited in some respects, the best approach was to work from the inside and seek to broaden and deepen its scope. Participation in EITI working groups yielded useful information and gave civil society more leverage.The Integrated Social Development Centre (ISODEC) became a reference for CSOs on the issue.The PWYP (Publish What You Pay) Norway Global Capacity Building Programme came at an opportune time to strengthen civil society’s ability to engage, particularly at the technical level. ISODEC and other CSOs also carried out awareness-raising workshops at the community level. Partly as a result of having been lobbied while in opposition, the new president,…

Christian Aid’s tax campaign in the UK

Christian Aid’s tax campaign in the UK sought to target the UK treasury.The relevant minister had a personal commitment to Christianity and to social justice. Christian Aid sent him a report on the links between the Christian faith and tax justice.The report resonated with the minister’s personal commitments and beliefs and he realised that his role in the treasury gave him the power to influence change. As a result of this, the minister engaged actively with UK non-governmental organisations (NGOs) on the issue and pushed for tax justice at the G20 London summit and at the Organisation for Economic Co-operation and Development (OECD).There is now a commitment from the G20 to work on supporting developing countries to benefit from tax information-sharing, and the OECD is working on country-by-country reporting.

Pluspetrol in Peru – from environmental pollution to tax dodging?

The oil industry in Peru has a chequered record. In a case at present going through the US courts, one industry giant is accused over a 30-year period of contaminating the rivers and lands of the indigenous Achuar communities – causing death, widespread poisoning and destroying their way of life. Another company operating in the same part of Peru, Pluspetrol, has placed rather more emphasis on community relations – setting up projects to improve health and nutrition for children, households and communities. Its aim is to reduce or eliminate social risks that may lead to violence or put its business activities at risk. However, even in the case of a company apparently taking corporate social responsibility seriously, it is not easy to determine who owns the company. When local campaigners started to research the company, they found out that Pluspetrol moved its head office from Argentinab to the Netherlands in 2000.They found the official documents that showed the company structure in databases rather than through publicly available sources, because Pluspetrol’s website did not provide the information. Because Pluspetrol does not have operations (production or sales) in the Netherlands, the campaigners wondered why the company would locate its head office there and turned to the Dutch Centre for Research on Multinational Corporations (SOMO) to find out more. Companies registered in the Netherlands are obliged to submit to the Dutch Chamber of Commerce an annual report that is more extensive than the annual report the company publishes on its website. SOMO searched in the Dutch Chamber of Commerce database for Pluspetrol, found a list of subsidiaries provided in its annual report and drew a company structure. Pluspetrol’s company structure showed that its subsidiaries in the Netherlands are so-called mailbox companies, indicated by the fact that the company does not have any employees…

Research for advocacy in Sierra Leone

Civil society organisations in Sierra Leone have been campaigning to their government for greater transparency and accountability and increased revenue from the extractives sector. Sierra Leone is rich in mineral resources and a number of foreign mining companies are reaping the benefits, yet the country captures woefully little revenue from the sector because of overly generous tax breaks and limited administrative capacity. Although Sierra Leone exported US$145 million worth of minerals in 2007, only US$10 million remained in the country – representing only 5 per cent of total government revenue. In part because of its failure to tax the mining sector, the government has sought to raise revenue through other means. In 2009 the government introduced a new goods and services tax (GST) – similar to value added tax (VAT). Shortly after this new tax was introduced, campaigners in Sierra Leone identified the potentially regressive nature of the new tax as a serious problem and they linked the issue with their existing work on taxation in the mining sector. So they commissioned research to deepen their analysis of the tax structure in Sierra Leone, including to see how the GST would be felt by different constituencies.The research comes at a time when those working on tax in Sierra Leone are seeking to broaden and strengthen their network and to address tax and development issues beyond the extractives sector. So as well as seeking to develop analysis and generate proposals for an equitable tax alternative that can be shared with policy-makers, the research report is also intended to ‘support more extensive and informed public debate and advocacy around tax issues’.This is an example of a well-timed proactive research-for-advocacy initiative. Reference no.4

Taxation for education in Nicaragua

In Nicaragua, a coalition of civil society organisations (CSOs) led by Coordinadora Civil and Instituto de Estudios Estratégicos y Políticas Públicas (IEEPP) has long worked to improve education in the country through campaigning for increased education spending. Coalition partners have recently decided to address tax policy issues and include tax reform as a specific part of their advocacy.This is a result of their problem and solution analysis, which led them to see that tax policies – specifically the level of tax collection and the inequity within the tax system – are fundamental obstacles to increasing spending on education. Reference no.1

Taxing tobacco in southeast Asia

The FCTC Alliance, Philippines (FCAP) has been advocating for much-needed reforms of the so-called ‘sin tax’ on tobacco. It has highlighted that at least 90,000 people die every year from tobacco-related diseases, in a country with an adult smoking prevalence of 28.3 per cent and 17 per cent youth prevalence and with the lowest taxes and prices on tobacco in southeast Asia (taxes on cigarettes are only 30 per cent on average, ranging from 14 per cent to 42 per cent). Research from the World Health Organization and the Philippine Department of Health outlines the range of undesirable costs that tobacco use in the Philippines imposes on society and its citizens, including disease and death, increased healthcare costs and potentially increased hunger, malnutrition and poverty, if scarce resources are used for purchasing tobacco. In order to demonstrate the benefits of taxing tobacco, they show the evidence of a strong correlation between the real price of tobacco and smoking levels in countries where this has been measured, including South Africa, Singapore,Thailand, Canada and the US. Thus, increasing the price of tobacco through taxation can have a real positive impact upon public health. Moreover, the taxes collected will generate additional revenue, which can be allocated for social development spending such as health and education. Action for Economic Reforms (AER) and FCAP have collaborated on a campaign that has succeeded in pushing for two tobacco tax reform bills to be filed in the lower House of Congress.The bills seek the setting of a single rate for all cigarettes, increasing the rate and indexing it to inflation, and earmarking some of the revenues for health promotion programmes and providing an alternative livelihood for tobacco farmers. Similarly, in Indonesia, members of the informal IndonesianTobacco Control Network (ITCN), such as researchers from the University of Indonesia’s…