May 4, 2009
Monique Perry Danziger, +1 202 293 0740 ext. 222
WASHINGTON, DC – Global Financial Integrity (GFI) applauds the Obama Administration’s efforts to fix the broken tax system that enables corporations to game the system to avoid paying their fair share of taxes.
The Administration’s focus on tax havens, and the way that U.S. corporations utilize those opaque financial centers, is an important step toward full transparency in the global financial system.
In addition to those efforts GFI urges the Administration and Congress to:
- Require all U.S.-based multinational corporations to report the names and locations of all subsidiaries, holding companies, and other entities owned or controlled by the corporation and,
- Require all U.S. -based multinational corporations to report the income and tax paid by each of those entities.
“Lack of transparency lies at the heart of the current worldwide economic crisis,” said GFI director Raymond Baker. “Making the beneficial ownership of subsidiaries, holding companies, and other entities related to a multinational corporation publically available will make it much more difficult for these companies to avoid paying their fair share of taxes.”
GFI recommends that Congress direct multinational corporations to make this beneficial ownership and tax payment information available on their Web sites and in their SEC 10-K filings to ensure that data is current and readily accessible to the general public.
Congressional efforts on tax haven abuse have included the introduction of the Stop Tax Haven Abuse Act by Senator Carl Levin (S. 506) and Congressman Lloyd Doggett (H.R. 1265) in March into the Senate Finance and House Ways and Means committees, respectively. Similar legislation is expected to be introduced by Senate Finance Committee Chairman Baucus this month.
“The President has called on Congress to act and we hope that they will heed this call,” said Baker. “In the midst of an historic economic crisis the U.S. cannot afford to ignore illicit financial practices which cost the Treasury hundreds of billions of dollars every year.”