The Tax Justice Network (TJN) is a coalition of researchers and activists with a shared concern about what they argue are the harmful impacts of tax avoidance

Tax avoidance

Tax avoidance is the legal utilization of the tax regime to one's own advantage, to reduce the amount of tax that is payable by means that are within the law. The term tax mitigation is a synonym for tax avoidance. Its original use was by tax advisors as an alternative to the pejorative term tax...

, tax competition

Tax competition

Tax competition, a form of regulatory competition, exists when governments are encouraged to lower fiscal burdens to either encourage the inflow of productive resources or discourage the exodus of those resources...

 and tax haven

Tax haven

A tax haven is a state or a country or territory where certain taxes are levied at a low rate or not at all while offering due process, good governance and a low corruption rate....

s, which "corrupt national tax regimes and onshore regulation, and distort markets by rewarding economic free-riders and mis-directing investment." The use of "justice" in the name illustrates its philosophies towards taxation, including a belief that taxes can be a tool for social justice

Social justice

Social justice generally refers to the idea of creating a society or institution that is based on the principles of equality and solidarity, that understands and values human rights, and that recognizes the dignity of every human being. The term and modern concept of "social justice" was coined by...

. The TJN was founded by Richard Murphy

Richard Murphy (accountant)

Richard Murphy is a chartered accountant, the founder of the Tax Justice Network and the TUC on taxation and economic issues, and a columnist for The Guardian and Forbes.com...

.

According to its 2009 accounts, the "The Tax Justice Network International Secretariat Limited" is a UK company controlled by Tax Justice Network Association Sans But Lucratif, a Belgian charity.

TJN publishes the Financial Secrecy Index

Financial Secrecy Index

The Tax Justice Network’s Financial Secrecy Index highlights global financial secrecy, corruption and illicit financial flows. The index was calculated in 2011 and includes data from 73 countries and territories...

, ranking 73 secrecy jurisdictions according to both their secrecy, and the scale of their activities.

Philosophy

Key ideals promoted by the TJN include tax co-operation, level playing fields, democratic taxation and transparency.

Progressive taxation

According to the group, progressive taxation requires that:

1. Income tax
   Income tax
   An income tax is a tax levied on the income of individuals or businesses . Various income tax systems exist, with varying degrees of tax incidence. Income taxation can be progressive, proportional, or regressive. When the tax is levied on the income of companies, it is often called a corporate...
   
   es should have progressive rates (i.e. increase with higher rates of pay);
2. Value Added Tax
   Value added tax
   A value added tax or value-added tax is a form of consumption tax. From the perspective of the buyer, it is a tax on the purchase price. From that of the seller, it is a tax only on the "value added" to a product, material or service, from an accounting point of view, by this stage of its...
   
   es (or VAT) should operate with exemptions to protect the least well off in any society;
3. Social security
   Social security
   Social security is primarily a social insurance program providing social protection or protection against socially recognized conditions, including poverty, old age, disability, unemployment and others. Social security may refer to:...
   
    contributions should not be capped;
4. Capital gains tax
   Capital gains tax
   A capital gains tax is a tax charged on capital gains, the profit realized on the sale of a non-inventory asset that was purchased at a lower price. The most common capital gains are realized from the sale of stocks, bonds, precious metals and property...
   
   es should be part of all tax regimes, and should not offer significant tax incentives when compared to income taxes (i.e. no avoidance by restructuring affairs to characterise income as capital gains);
5. Wealth
   Wealth tax
   A wealth tax is generally conceived of as a levy based on the aggregate value of all household holdings actually accumulated as purchasing power stock , including owner-occupied housing; cash, bank deposits, money funds, and savings in insurance and pension plans; investment in real estate and...
   
    or inheritance tax
   Inheritance tax
   An inheritance tax or estate tax is a levy paid by a person who inherits money or property or a tax on the estate of a person who has died...
   
   es should be in operation;
6. Tariff
   Tariff
   A tariff may be either tax on imports or exports , or a list or schedule of prices for such things as rail service, bus routes, and electrical usage ....
   
   s and trade taxes should used when needed to protect fledgling industry, natural resource exploitation or when they are cost effective alternatives to charges on the poorest members of a society.

The group's support for progressive taxation means that it is opposed to regressive tax

Regressive tax

A regressive tax is a tax imposed in such a manner that the tax rate decreases as the amount subject to taxation increases. "Regressive" describes a distribution effect on income or expenditure, referring to the way the rate progresses from high to low, where the average tax rate exceeds the...

ation. Regressive taxation they characterise as including:

1. Flat tax
   Flat tax
   A flat tax is a tax system with a constant marginal tax rate. Typically the term flat tax is applied in the context of an individual or corporate income that will be taxed at one marginal rate...
   
   es;
2. Income taxes with capped liabilities;
3. VAT without exemptions;
4. National insurance
   National Insurance
   National Insurance in the United Kingdom was initially a contributory system of insurance against illness and unemployment, and later also provided retirement pensions and other benefits...
   
    regimes that cap contributions;
5. Low rate capital gains tax regimes;
6. the absence of wealth related taxation;
7. Substantial allowances and reliefs available only to the well-off meaning that they pay lower than average real rates of taxation;
8. Benefit systems that create high effective marginal rates of taxation.

Transparency

In relation to transparency, the TJN's philosophy supports:

1. Relevant company details being made publicly available for inspection, wherever the company is incorporated in the world. This would include details of its constitution
   Constitutional documents
   In relation to artificial persons, the constitutional documents of the entity are the documents which define the existence of the entity and regulate the structure and control of the entity and its members...
   
   , ownership, management and accounts. This requirement would extend to all other entities created by law including charities, foundations
   Foundation (charity)
   A foundation is a legal categorization of nonprofit organizations that will typically either donate funds and support to other organizations, or provide the source of funding for its own charitable purposes....
   
   , trusts
   Trust law
   In common law legal systems, a trust is a relationship whereby property is held by one party for the benefit of another...
   
   , partnership
   Partnership
   A partnership is an arrangement where parties agree to cooperate to advance their mutual interests.Since humans are social beings, partnerships between individuals, businesses, interest-based organizations, schools, governments, and varied combinations thereof, have always been and remain commonplace...
   
   s with limited liability as well as material entities run by individuals and partnerships without limited liability;
2. Banning the use of all nominee arrangements whether for ownership or management;
3. Wide disclosure by groups of companies of accounting information;
4. All tax accounting to be made available to tax authorities;
5. All tax disclosure to be consistent and to be made on the basis that (in the group's words) all "cards are face up on the table".

The TJN is fundamentally opposed to:

1. Tax haven
   Tax haven
   A tax haven is a state or a country or territory where certain taxes are levied at a low rate or not at all while offering due process, good governance and a low corruption rate....
   
   s;
2. Unpublished accounts, constitutions, membership information and management details for all entities created by statute
   Statute
   A statute is a formal written enactment of a legislative authority that governs a state, city, or county. Typically, statutes command or prohibit something, or declare policy. The word is often used to distinguish law made by legislative bodies from case law, decided by courts, and regulations...
   
   ;
3. The use of nominees;
4. Banking secrecy when used to prevent tax disclosure;
5. Trusts when used to create tax advantages
   Tax avoidance
   Tax avoidance is the legal utilization of the tax regime to one's own advantage, to reduce the amount of tax that is payable by means that are within the law. The term tax mitigation is a synonym for tax avoidance. Its original use was by tax advisors as an alternative to the pejorative term tax...
   
    or to recreate the effects of banking secrecy laws;
6. Inconsistent or incomplete tax disclosure;
7. Non-disclosure of tax accounting by legal entities;
8. The use of consolidated financial statements to hide offshore and other transactions of which the group may not wish its shareholders and others to be aware.

Organisation

According to its website, the organisation is committed to:

• Is committed to supporting the launch of a Tax Justice Network for Africa in 2007
• Organising an annual workshop bringing together researchers, campaigners and policy makers

According to its website, the TJN is directed by an International Steering Committee elected from their global membership. They claim to have legal, economic and tax specialists to advise on policy issues, and an expert group to assist with publication of briefing papers.

The group has an International Secretariat based at the New Economics Foundation in London. It is constituted as a not for profit association

Voluntary association

A voluntary association or union is a group of individuals who enter into an agreement as volunteers to form a body to accomplish a purpose.Strictly speaking, in many jurisdictions no formalities are necessary to start an association...

. The managing body is Council of Members and Supporters which meets annually.

Criticisms

Some people have argued that whilst they are in agreement with the objectives of the Network, mention is hardly ever made A Manifesto for Tax Justice of the fact that most present-day tax systems are vulnerable to avoidance and evasion.

People are mobile, whilst corporations exist in multiple locations and through the use of transfer accounting, profits can be made to disappear and reappear in ways which are the most advantageous from the point of view of minimising tax liability. Yet the taxation of people and corporations remains the primary source of government revenue.

To date, it is a major weakness of the Network that its members have largely failed to deal with the need for tax reform with a view to making the tax systems themselves more secure and less vulnerable to avoidance and evasion.

Another criticism is that, by decreasing competition among governments to provide better services at lower cost, the Network is promoting what is essentially a price-fixing scheme by a cartel of high-tax jurisdictions.

Membership

The network's members are said to include:

• development organisations and NGOs;
• faith groups;
• trade union
  Trade union
  A trade union, trades union or labor union is an organization of workers that have banded together to achieve common goals such as better working conditions. The trade union, through its leadership, bargains with the employer on behalf of union members and negotiates labour contracts with...
  
  s;
• academics;
• journalists;
• economists;
• financial professionals, and
• public-interest groups.

Founding objectives

The founding objectives of the network are:

• to raise the level of awareness about the 'secretive' world of offshore finance;
• to promote links between interested parties around the world, particularly involving developing countries;
• to stimulate and organise research and debate;
• to encourage and support national and international campaign activity.

The cornerstone of the organisation's objectives is the belief that tax haven

Tax haven

A tax haven is a state or a country or territory where certain taxes are levied at a low rate or not at all while offering due process, good governance and a low corruption rate....

s cause poverty.

Campaigns and campaign objectives

The campaign objectives of the organization are explained in part 2 of the Declaration A Manifesto for Tax Justice, and some broad policy proposals are outlined in the annex to the Manifesto.

The TJN campaigns to identify and remedy the deficiencies of national and international tax policy frameworks and to support the activities of existing campaigns in different countries by connecting them to a worldwide movement.

In particular they aim to:

• promote more local campaigns for 'tax justice', especially in developing countries; and
• provide a medium through which such issues can be promoted within multilateral agencies such as the United Nations
  United Nations
  The United Nations is an international organization whose stated aims are facilitating cooperation in international law, international security, economic development, social progress, human rights, and achievement of world peace...
  
  , the World Bank
  World Bank
  The World Bank is an international financial institution that provides loans to developing countries for capital programmes.The World Bank's official goal is the reduction of poverty...
  
  , the International Monetary Fund (IMF)
  International Monetary Fund
  The International Monetary Fund is an organization of 187 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world...
  
  , the Organisation for Economic Cooperation and Development (OECD) and the European Union
  European Union
  The European Union is an economic and political union of 27 independent member states which are located primarily in Europe. The EU traces its origins from the European Coal and Steel Community and the European Economic Community , formed by six countries in 1958...
  
  .

The TJN assets that the purpose of trying to operate at this level is to counteract the activities of legal, business and accounting lobbying

Lobbying

Lobbying is the act of attempting to influence decisions made by officials in the government, most often legislators or members of regulatory agencies. Lobbying is done by various people or groups, from private-sector individuals or corporations, fellow legislators or government officials, or...

 organisations which they claim devote considerable time and money to securing favourable tax treatment on behalf of wealthy individuals and powerful corporation

Corporation

A corporation is created under the laws of a state as a separate legal entity that has privileges and liabilities that are distinct from those of its members. There are many different forms of corporations, most of which are used to conduct business. Early corporations were established by charter...

s.

Publications

The network offers a free publication called Tax us if you can, which offers a guide to the language of international tax policy and shows how professionals profit from 'abusive tax practices'. It also outlines the numerous policy failures that have encouraged the creation of the 'shadow economy' of tax havens and proposes a range of practical solutions to this global crisis.

In March 2005 the network published a briefing paper called The Price of Offshore which estimated that the amount of funds held by individuals in offshore tax havens, is about 11.5 trillion US dollars. Using this estimate they calculated the worldwide tax revenue lost on the income from these assets at 255 billion

1000000000 (number)

1,000,000,000 is the natural number following 999,999,999 and preceding 1,000,000,001.In scientific notation, it is written as 109....

 US dollars annually. This amount, if correct, would more than plug the financing gap to achieve the United Nations

United Nations

The United Nations is an international organization whose stated aims are facilitating cooperation in international law, international security, economic development, social progress, human rights, and achievement of world peace...

' Millennium Development Goal of halving world poverty by 2015 assuming that it could be collected by national governments and was then diverted to that purpose.

In June 2000, Oxfam

Oxfam

Oxfam is an international confederation of 15 organizations working in 98 countries worldwide to find lasting solutions to poverty and related injustice around the world. In all Oxfam’s actions, the ultimate goal is to enable people to exercise their rights and manage their own lives...

published a report called Releasing the Hidden Billions for Poverty Eradication, which drew attention to the supposed harmful impacts of tax havens on developing countries and proposed to identify why such impacts are felt more forcefully there.

External links

• Tax Justice Network website
• The Price of Offshore, briefing paper of the network
• Tax us if you can, free publication of the network
• Tax blog of Tax Justice Network's research adviser