Paying tax with pleasure?

– It is journalists who have carved out ministers, business leaders and notabilities from the tax heavens. The journalists have done their part of the job. Now it is up to the politicians to do theirs, Kjersti Løken Stavrum, CEO of the Tinius Trust said at the launch of the report on taxating multinational corporations by Tax Justice International in Oslo.

Today, Tax Justice Norway launched the report “Enhetlig skattelegging av multinasjonale foretak – strategi for skattelegging av statsløs inntekt” (Consolidated taxation of multinational enterprises) written by tax lawyer Gregar Berg-Rolness in Oslo. The report seeks to explain the challenges of today’s tax regime, describe existing actions that could improve the tax system and show how Norway can play a more significant role in taxing multinational businesses. The report can be downloaded here (in Norwegian).

After the presentation of the report, a panel of guests from the Ministry of Finance, the Norwegian Confederation of Trade Unions, Civita, Agenda and The Tinius Trust commented on the report.

Kjersti Løken Stavrum, the CEO of the Tinius Trust, underlined that we live by a dysfunctional tax system.

– From time to time, we as citizens and tax payers are asked the question: “Do you pay your taxes with pleasure?”. But we need to stop asking questions on tax and pleasure. It should be legitimate to say that we pay our tax with great concern –because we are paying our taxes to a dysfunctional system, she said on stage.

Read Kjersti Løken Stavrums’ comments on the report in full text below:

Photo by: Peter Henriksen Ringstad, Tax Justice Network Norway.

 

Why do we expect people to pay their taxes with pleasure?

To solve the global tax tangle, we need all good forces to team up.

We must trigger the experts, those who haven’t lost sight although facing a tax system that is rapidly becoming manipulative complex.

We must trigger the idealists, those who by heart understand that the tax system is intolerable.

We must also trigger the share holders of these global businesses, those who vote at general assembly’s and those who can hold companies accountable. Owners can contribute to transparency and bring forward the figures for revenue, profit and tax. We need to bring back the knowledge on our economy and thus our society. These numbers often speak for themselves.

Last, but not least, we need to trigger the citizens of our societies.

No one can change this alone, but everyone can do their bit. Step by step we will see change towards a more modern tax system.

The report that is launched today on consolidated tax bases, highlights one way to cut through the current challenges. The report suggests consoilidating all accounting across the companies, taxing them on this basis and bringing the money back to the countries that are part of the arrangement. It’s a positive signal that we see several different suggestions on how we can change the current tax system. Its proves that we are on the right track.

Tax is difficult and complicated. We all easily feel distanced and thus indifferent. This report is a valuable contribution to prevent that feeling, and instead create a solid overview. The report also holds power accountable, and points especially to our national politicians. They should feel obliged to do more. Beacause they can.

From time to time, we as citizens and tax payers are asked the question: “Do you pay your taxes with pleasure?”. The question tries to position you as either a citizen who understands the good spirit of the tax system (your contribution is resulting in good schools, roads, health service), or a citizen who don’t get it. When we nod, as expected, smile and say “yes – I pay my tax with pleasure”, we position ourselves as worthy citizens of the welfare state.

But after the Lux Leaks, the Panama Papers and not least, Paradise Papers (reminding us about the legal movement of capital to tax heavens), we need to stop asking questions on tax and pleasure. After these revelations, it should be legitimate to say that we pay our tax with great concern – because we are paying our taxes to a dysfunctional system.

To fire up this debate, I want to remind you of the number: NOK 486.568,-. That is what Facebook paid in taxes to Norway last year. And because we have open tax registers in Norway, I can disclose that I paid a 100.000, – NOK more (being a private person). The CEO of Google in Norway pays more tax to our country, than the business that employs him – a company that otherwise aims to collect 10 billion NOK from the Norwegian market by 2020. It’s not worth waiting for.

For a long time, we have accepted a global tax system with great negative impact on weak, developing countries. The global technology giants are changing that. These companies interfere with industries all over the world – they compete directly with our businesses on unequal terms. And all these local and national businesses will not accept this arrangement.

The Tinius Trust have reached out to the Norges Bank Investment Management (NBIM), which manages Norwegian Government Pension Fund Global (GPFG) – the largest found in the world and a substantial share holder of the technology companies to inspire them to bring forward the core numbers and figures on revenue and tax. The Fund have three precise expectations about tax and transparency:

  • Tax should be paid where the revenue is generated.
  • Tax issues is a concern of the Board.
  • Public country-by-country reports should be the norm for businesses.

The Tinius Trust have stated that we expect these principles to be actively used.

Finally, I would like to remind you of the obvious: It is high quality journalism based on international cooperation across a wide range of newsrooms that have scrutinized the dysfunctional tax system we live by. It is journalists who, in a unique collaboration, have carved out ministers, business leaders and notabilities from the tax heavens. The journalists have done their part of the job. Now it is up to the politicians to do theirs.