Rodrigo Barahona and Susana Ruiz describe how the Tax Havens Free Zones initiative is gathering momentum in the fight against inequality and poverty.
When large companies and wealthy individuals divert part of their income to tax havens, this leaves governments without the resources they need to address poverty and invest in healthcare, education and jobs.
Oxfam analyzed 200 of the world’s largest companies, and found that 90% had a presence in at least one tax haven. Corporate tax avoidance schemes leave developing countries particularly vulnerable; depriving them of around $100bn every year.
Oxfam is part of a global movement for tax justice. This includes the fight against tax havens. Together, we jointly:
- Research corporate tax avoidance, and demonstrate its negative impact on public services, such as health and education;
- Call for new international tax rules and a global tax body where developing countries can have an equal voice;
- Engage with the World Bank, IMF, OECD and the G20 to prioritize the fight against tax dodging.
At the European level, we have also advocated for more transparency, and a blacklist of tax havens that is fair, objective and free of political interference. In many countries, we work with partners to drive policy changes for progressive tax systems.
The Tax Havens Free Zones initiative offers an opportunity to influence from the bottom up. Oxfam Intermon has worked on this initiative since 2015 to encourage public procurement policies that prioritize responsible tax behaviour, and end the use of tax havens.
By working with cities and municipalities, we can create the conditions for them to work together and effect change at all levels. We are looking for opportunities to scale up to national government, and target other organizations, including universities.
More than 80 towns in Spain have now declared themselves to be Tax Havens Free Zones.More than 80 towns and four autonomous communities in Spain have now declared themselves to be Tax Havens Free Zones. This shows political will. And at least three town councils have already made real policy changes, including fair tax criteria in their public procurement policy.
Elsewhere, FairTax Mark in the UK, Plateforme Paradis Fiscaux et Judiciaires in France, ATTAC in Sweden and Norway, Finnwatch in Finland, and the Plataforma per una Fiscalitat Justa in Catalonia are also generating significant results.
What made implementing Tax Havens Free Zones possible?
We carried out surveys and interviews in a sample of cities where Oxfam Intermon had worked with partners to successfully influence for a Tax Havens Free Zone, and identified the following critical success ingredients:
- Agile ways of working meant we could take advantage of contextual opportunities; including elections, changes of municipal government, and media scandals, such as the Panama Papers. We positioned our policy proposals as an alternative to the injustice of tax havens.
- Our prior involvement with other related civil society campaigns meant we had established existing relationships with key stakeholders. This opened many opportunities for lobbying and collaboration. In fact, in many representatives from towns, authorities and political parties proactively asked Oxfam for support.
- Oxfam and our partners published a Guide for City Halls, providing detailed, grounded and practical ideas for implementation—all aligned to existing legal frameworks. We have also used the guide content to provide training and counselling to public administration— creating better conditions for change.
Many citizens support the Tax Havens Free Zones initiative—25,000 people signed the petition and campaigned in their cities. And in a recent survey, 74% of the population said they wanted to abolish tax havens. However, our research also identified that this awareness and engagement needs to be reinforced to sustain social pressure. We seek to improve the way we engage and help mobilize citizens to make this happen.
Any citizen or community can contribute to the fight against poverty, and ask their local authority to join initiatives like Tax Havens Free Zones. From global to regional and local, we must keep engaging with multiple actors to change the rules that keep people living in poverty, and that includes corporates themselves. By improving corporate tax behavior, we will all reap the benefits.