A United Nations expert has urged António Guterres, the newly selected UN secretary-general, to take immediate action to address tax havens. Alfred de Zayas, the UN’s independent expert on the promotion of a democratic and equitable international order, has said that the appointment of Guterres offers a new opportunity for the world to tackle illicit financial flows, urging the UN to draft a convention that would ban tax havens worldwide.
“The choice of Mr. Guterres as the next UN secretary-general offers a unique opportunity to advance the fight against tax evasion and illicit financial flows, at a moment where the world is paying increasing attention to these crucial issues,” de Zayas explained in a report to the UN General Assembly. “Trillions of dollars necessary for combatting extreme poverty and addressing climate change are being kept offshore, thus escaping just taxation and effectively stealing hundreds of billions of dollars each year from the public treasuries.”
De Zayas explained that tax havens have a significant human cost and undermine democracy and equitability. “Widespread tax avoidance, tax evasion, tax fraud, and profit-shifting, facilitated by bank secrecy and a web of shell companies registered in tax havens, are now routinely documented, but their true human cost is only revealed progressively,” he said. “Corruption, bribery, tax fraud, and tax evasion have such grave effects on human dignity, human rights, and human welfare that they shock the conscience of mankind. They should be prosecuted nationally and internationally.”
De Zayas, who is also a professor of international law at the Geneva School of Diplomacy, has pointed out that many experts have argued that tax evasion is a form of human rights abuse because it deprives governments of the revenue needed to fulfill specific obligations outlined in human rights treaties and to reduce poverty. In addition to a convention banning tax havens, his report also called for the creation of an intergovernmental body on taxes that would develop global rules and regulations on taxation while facilitating improved global governance on all tax-related matters. Among the rules and regulations called for are the introduction of a financial transaction tax and the agreement of a minimum corporate tax to reduce tax competition between different countries. It also calls for the creation of public registries of ultimate beneficial ownership, among other things.
Lastly, de Zayas called for greater protection for whistleblowers who release information about tax evasion, arguing they are key to ensuring transparency. He pointed out that whistleblowers are one of the most effective means of combatting corruption but that they often pay a heavy price for their activities. He argued that adopting legislation to protect these whistleblowers was in the best interest of an equitable and democratic global order.
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