Corporate tax is a feminist matter

CitiGroup, Coca Cola, ExxonMobil, General Motors, Goldman Sachs, Verizon, Wal-Mart, Pfizer, JP Morgan Chase, Bank of America and Microsoft; of all the things these multinational corporations (MNCs) agree on, two things stand out: a proclaimed devotion to the feminist agenda and a penchant for tax dodging.

On the former, all MNC’s claim to dedicate some part of their corporate responsibility and philanthropy duties to the “economic empowerment” of women and girls in poor countries, and to that end, promote business skills, good saving practices and access to loans as a panacea for women’s empowerment and their countries’ development. The steps these corporations take “to advance and empower women” make them role models for gender justice among MNC’s, according to the United Nations Global Compact.

But then there’s the tax issue. A few months ago, the NGO Oxfam calculated that between 2008 and 2014 alone, the 50 largest public companies in the US accumulated some $337 billion in tax breaks, while holding a whopping $1.4 trillion in offshore cash reserves. All the companies mentioned above are on the list.

Tax dodging by MNCs represents “integral components of [their] profit-making strategies,” and a huge force of socio-economic devastation in particular for the Global South, where such taxes represent a larger share of overall government revenue (16%, according to the IMF, versus 8 % for their high-income counterparts), and where the technical capacity to deal with complex tax offshore investment hubs and other loopholes is weaker. Here, Oxfam argues, unpaid corporate taxes can make the “difference between life and death, poverty and opportunity.” The practice costs poor countries aroundUS$ 100 billion dollars a year.

The result, predictably, is that across Africa, the working poor, (over 38% of the population in sub-Saharan Africa) often end up carrying the burden of raising tax revenue while the multinationals go scot-free. In Malawi, for example, where tax incentives for the mining sector allegedly suck out eight times the amount the government collects in revenues every year, some say that “it is the order of the day for small businesses to pay more tax than multinational companies.”

Meanwhile, as a new investigation reveals, South African companies make extensive use of tax haven benefits in the Netherlands, where, apparently, “an office with a house plant is enough to satisfy tax inspectors that a company really has operations in [Amsterdam],” rather than just a letterbox company. (By routing money through the Netherlands, companies reportedly push down their tax rate from to as low as 0,6 %. Of the 20 largest companies listed on the Johannesburg stock exchange, 14 have one or more subsidiaries in the Netherlands).

Within progressive feminist groups and anti-poverty NGOs, tax justice is now treated as a key development and human rights concern, with many feminists pointing out that it’s women and children who suffer the most, when social services are not provided.

Chiara Capraro worked for Christian Aid, whose Death And Taxes report estimated, as early as 2008, that developing countries lost more to false invoicing and trade mis-pricing by corporations (more on that later) than what comes in as development aid. Later, in partnership with Tax Justice Network Africa (who tweet here), they published “Africa Rising” which (amongst other things) outlines steps on how to stop corporations and other elites from abusing tax loopholes. To Chiara, who is now Policy and Advocacy Manager for Women’s Economic Rights at Womankind in London, corporate tax is a feminist matter and a huge potential source of empowerment for women, if given the chance to learn about, and organize around it.

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By Maria Hengeveld