Odious Debts Online
March 22, 2007

The annual global graft ranking by Transparency International has come under fire for not including tax havens in its survey.

The Norwegian aid journal, Development Today, reports that the international NGO Tax Justice Network (TJN) has called on Transparency International to rate tax havens as highly, if not higher, than bribery in terms of impact because developing countries lose more in revenue this way than from bribery.

TJN director John Christensen told Development Today that Transparency International’s Corruption Perception Index (CPI) distorts the published perception on corruption because its only looks at one side of the equation. For example, said Christensen, the CPI “consistently identifies Africa as a nexus of corruption” while 40 per cent of countries ranked “least corrupt” are offshore tax havens.

The Norwegian born French magistrate and high-profile corruption fighter, Eva Joly, seconds TJN’s concerns. She claims tax havens are “one of the biggest problems the world faces today.”

In another report by Development Today, Joly described tax havens as “phase two” in the corruption debate:

“The system is such that the really rich people manage to evade a large share of their tax payment (which should go to rich countries) by locating their activities in tax havens. As a result, the tax burden becomes heavier for most people,” Joly told Development Today, adding that there is also the additional concern these “secret structures” pose in regard to security because terrorists can use them to hide funds.

According to Transparency International, its index cannot be extended or revised to include tax haven issues.

The full text for this report by Development Today is available from the journal’s website (subscribers only):
www.development-today.com