Tax Avoidance, Tax Competition and Globalisation: making tax justice a focus for global activism

Hidden from the public eye financial capital has been completely reconfigured over the past thirty years in order to bypass nationally-based tax and regulatory regimes. Using the 70 plus tax havens dotted across the globe, wealthy individuals and transnational businesses have adopted highly aggressive tax avoidance strategies, whilst also forcing the governments of mainstream nations to engage in a harmful tax competition to attract direct and portfolio investment capital. The existing global framework for cooperation on tax affairs is totally inadequate to its task, and the political will to tackle this problem is virtually non-existent as governments acquiesce to pressures from financial capital. Whilst poor countries lose an estimated US$500 billion annually to dirty money flows, which includes tax avoidance and related capital flight, neo-liberal pressure groups in the United States have been lobbying against the OECD initiative to stem harmful tax competition. Civil society is now mobilising to counter the tax avoidance industry and to challenge the idea that tax competition can play a useful role in development strategy.