January 22, 2009
Monique Perry Danziger, +1 202 293 0740 ext. 222
Global Financial Integrity
Monique Perry Danziger, +1 202 293 0740 ext. 222
WASHINGTON, DC – Global Financial Integrity (GFI) urges Congress to institute measures requiring greater transparency following the release of a Government Accountability Office (GAO) report stating that eighty-three of America’s 100 largest publicly traded corporations and contractors control secret offshore operations that could help them avoid paying U.S. taxes on their profits.
“The current financial crisis is due in no small part to the opacity of the system,” said GFI Director Raymond Baker. “Pension funds cannot reliably invest, banks cannot reliably loan, and the government cannot reliably estimate revenue when such a large part of business is hidden.”
In an effort to increase transparency and help curb illicit financial practices including the use of secrecy jurisdictions for tax evasion by U.S. companies and contractors GFI recommends that:
- Country-by-country reporting of sales, profits, and tax paid by multinational corporations be required in audited annual reports and tax returns;
- The beneficial ownership, control and accounts of companies, trusts and foundations be readily available on public record to facilitate effective due diligence;
- Automatic cross-border exchange of information between national authorities on income, gains and property received by non-resident individuals, corporations, and trusts, be made mandatory.
To encourage increased transparency in the global financial system GFI recently launched the Task Force on Financial Integrity and Economic Development. Members of this unique global coalition of civil society organizations and more than 50 governments are collaborating to address the inequalities in the global financial system that penalize billions of people, and will advocate for greatly improved corporate accountability.
“The ‘Stop Tax Haven Abuse Act’ is an excellent model of the kind of legislative action Congress should take to close loopholes in existing law and pull back the veil which has enabled opaque business practices to continue unabated in these secrecy jurisdictions for too long,” said Baker. “In terms of what we can expect from the new administration, President Barack Obama co-sponsored the “Stop Tax Haven Abuse Act’ when it was introduced in 2007 and affirmed his intent to crack-down on tax havens in his campaign for the presidency.”