The United Nations has launched the High-Level Panel on Financial Accountability, Transparency and Integrity (FACTI) to address corporate tax abuse and other illicit financial flows, in order to ensure the goals and targets set out in the Sustainable Development Goals are achieved.
The High-Level Panel on International Financial Accountability, Transparency and Integrity for Achieving the 2030 Agenda (FACTI Panel) was created jointly by the president of the UN General Assembly and president of the UN Economic and Social Council.
The panel consists of 15 members drawn from policymakers, academia, civil society and the private sector.
The systems that governments use to address different types of financial corruption are fraying"
"The money that is being hidden in offshore tax havens, laundered through shell companies and outright stolen from public coffers should be put toward ending poverty, educating every child, and building infrastructure that will create jobs and end our dependence on fossil fuels," said Ibrahim Mayaki, co-chair of the panel and former prime minister of Niger.
"The systems that governments use to address different types of financial corruption are fraying and do not yet effectively deal with the new ways that are used to game the system," he added. "We aim to help change that."
Corporate profit shifting via tax havens collectively costs governments between $500bn and $600bn a year in lost corporate tax revenue. In addition, $7trn of private wealth is hidden in offshore tax havens.
According to a report by Oxfam, corporate tax dodging costs poor countries at least $100bn every year. "That is enough money to provide an education for 124 million children and prevent the deaths of almost eight million mothers, babies and children a year."
FACTI will look at what further action governments and financial institutions need to take in various areas, such financial and beneficial ownership transparency, tax matters, and bribery and corruption. The panel will meet at different points over the next year in regional consultations.
Alex Cobham, chief executive of the Tax Justice Network, said: "The FACTI panel provides a powerful opportunity to address two major ‘tax gaps' in the global financial architecture: first, the lack of representation at the OECD for lower-income countries that lose most to corporate and individual tax abuse; and second, the lack of a truly inclusive forum in which countries can set international tax rules.
"If it can override the objections of OECD countries to losing some of their disproportionate influence, and instead chart a course to immediate rectification of these gaps, the FACTI panel will deliver historic progress."
An interim report will be issued in July 2020 and a final report in February 2021.
Individual holdings breach limits