The Tax Justice Network's November Taxcast

The Tax Justice Network's November Taxcast
In November's Taxcast: is it the beginning of the end of tax avoidance for multi-national corporations? Some countries fight back. And the Finance Curse - why an oversized finance sector's bad for an economy. A special extended edition.http://taxjustice.blogspot.co.uk/2012/11/the-tax-justice-networks-november.html

Where is Africa's share of the spoils?

The continent sees little of the vast profits made from its natural resources

 wealth of natural resources can be a blessing or a curse. It has helped to create prosperity in countries such as Norway, Canada, Malaysia, the Gulf states and Scotland. Much of the developing world has unfortunately seen the ugly side: enclaves of wealth amid poverty, waste and corruption and the undermining of productive agriculture and industry with an overvalued exchange rate.

Moreover, windfalls of wealth have created a rent-seeking culture in which living standards are not earned and there is a neglect of entrepreneurial endeavour, technological innovation and hard work.

Each year, international oil, gas, forestry and mining companies make large payments to the governments of resource-rich developing countries, though their citizens see very little of it. Charities have estimated that in Africa this income is six times greater than the aid the continent receives. Where does all this money go?

Too much of it is siphoned away from those who need it most and lodged into foreign bank accounts and offshore tax havens. These vast sums of money that disappear into the coffers of bent politicians and bureaucrats are part of a culture of corruption that is fuelled by a lack of transparency. Instead of being used to fight poverty, boost economic growth and improve social conditions, this money often funds wars and personal vanity projects.

For those companies that do want to operate ethically, this behaviour poses a real problem. They may pay their taxes in perfectly legal manner, but there is no accountability.

In the UK, working with my team of Ed Davey, Norman Lamb and Jo Swinson, as well as other colleagues in the coalition, we have been striving to achieve a balance between promoting transparency without encroaching on commercial confidentiality. The ability to track payments and make a comparison of revenues earned and investment made will combat corruption and ensure that the sale of natural resources benefits the many, not the few.

The standard is set by the US.http://www.independent.co.uk/voices/comment/where-is-africas-share-of-the-spoils-8348306.html Thanks to that country's passage of the Dodd-Frank Act, companies are forced to disclose the money they pay to governments above a threshold of $100,000. They must also provide details on each individual project, which contributes to these payments, though there are genuinely tricky problems around the definition of a project. We in the UK are taking the lead within the European Union in promoting the creation of a new global standard for transparency that will cover the majority of the industry's companies.

It's time to put politics aside. Those involved need to get behind this initiative and ensure the EU, ahead of the G8, leads the world in a transparency agenda.

We're confident we can take this first historic step in lifting the lid on the financial dealings between extractive companies and developing countries. These proposals are an important step in reducing corruption and increasing accountability in resource-rich countries.

Dr Vince Cable is Secretary of State for Business, Innovation and Skills

How To Rob Africa; Why does the Western world feed Africa with one hand while taking from it with the other?

How To Rob Africa; Why does the Western world feed Africa with one hand while taking from it with the other?

Africa and the rest of the developing world are often criticized for failing to effectively combat corruption. While many of these countries have a lot to do to get their domestic house in order, not enough attention is paid to the systemic global problems that make it very difficult for even a well-meaning, responsible African government to put a serious dent in illicit financial flows. Western financial secrecy and lax regulations make it very easy for elites in developing countries to squirrel away illicit money, far away from any tax authority.

In a great new documentary, Al Jazeera looks at how this is happening and how it prevents the continent from escaping widespread poverty despite immense natural resource wealth and an industrious, hard-working, young population. A great quote:

“When these diamonds came, they came as a God-given gift. So we thought now we are going to benefit from jobs, infrastructure, we thought maybe our roads were going to improve, so that generations and generations will benefit from this, not one individual. But what is happening, honestly, honestly it’s a shame!”

Watch the documentary here:  http://www.aljazeera.com/programmes/peopleandpower/2012/11/201211714649852604.html

Review By EJ Fagan

EJ Fagan is the New Media / Advocacy Coordinator for the Task Force on Financial Integrity & Economic Development in Washington, DC. He holds the same position with Global Financial Integrity.

For this and more stories

Follow us on Twitter:   https://twitter.com/TaxJusticeAfric

Like our Facebook page: http://www.facebook.com/TaxJusticeNetworkAfrica

Ghana gets $2.5b in mining investments in three years

Ghana gets $2.5b in mining investments in three years – Report

Within three years an amount of $2.5 billion has been invested in mining in Ghana.

Mr Mike Hammah, the Minister of Lands and Natural Resources says between 2009 and 2011 the  investment inflow for Ghana’s mining sector was $2.5 billion.

He also said gold production increased consistently; 3.1 million ounces in 2009, 3.4 million ounces in 2010 and 3.6 million ounces in 2011 which is the highest gold production ever in Ghana, according to a report by the Ghana News Agency.

The report cited him as saying tax on gold contributed GH¢1 billion, representing 27.61 per cent of total collection of the Ghana Revenue Authority in 2011.

It also contributed 42 per cent of total merchandise export within the same period, he said.

According to the Bank of Ghana exports of gold amounted to $1.5 billion in the first three months of 2012.

The report indicated that about 28,000 people were employed in the mining sector, while mineral royalties returned to the mining communities in the Western, Ashanti and Brong Ahafo Regions from 2009 to 2011 stood at GH¢41 million.

The corporate social responsibility programme of the mining companies stood at GH¢43 million within the same period, the report said.

Mr Hammah, according to the report, said six mining regulations have been passed by Parliament to operationalise the Minerals and Mining Act 2006 (Act 703).

The Ministry is facilitating the passage of the Mineral Development Fund Bill to help to address developmental issues in mining communities, he said.

The report noted that corporate income tax increased from 25 per cent to 35 per cent while effective mineral royalty rate also increased from three per cent to five per cent.

A proposal for a Windfall Tax is under consideration, it added.

Meanwhile, Ghana is the seventh highest gold producer in the world.

The country moved from the eighth place in 2010 to seventh in 2011 globally in terms of gold output, according to figures compiled and released April 5, 2012 by the London-based metals-consulting company CRU.

Ghana’s output of gold in 2011 was 102 metric tonnes, up from 92 metric tonnes in 2010, the figures show.

Mining has been going on in Ghana for over 100 years.

Gold, diamond, bauxite and manganese are mined in the country. Recently, large deposits of iron ore have also been discovered.

By Emmanuel K. Dogbevihttp://www.ghanabusinessnews.com/2012/11/11/ghana-gets-2-5b-in-mining-investments-in-three-years-report/