October, 08 2021, 01:52pm EDT
![Financial Accountability and Corporate Transparency (FACT) Coalition](https://assets.rbl.ms/32012618/origin.png)
For Immediate Release
Contact:
Clark Gascoigne
Phone: (202) 813-0290
Email:Â cgascoigne@thefactcoalition.org
Global Tax Deal Advances, But Questions Persist
While OECD Framework is Historic, Certain Process and Proposed Revenue Allocation Details Raise Political Viability Concerns
WASHINGTON
A revised and "more final" two-pillar framework to create a global agreement on the taxation of multinational enterprises (MNEs) in a more digitalized and global economy was made public today (the Framework), further advancing efforts under the Organization for Economic Cooperation and Development's (OECD's) Inclusive Framework. While the Framework represents a paradigm shift in the way that MNEs are taxed--allocating the right to tax certain excess profits of very large MNEs to "market" jurisdictions and creating a global minimum corporate tax-- Friday's Framework raises concerns about the long-term political viability of this two-pillar global tax solution.
"This OECD framework represents a critical opportunity to begin to dismantle U.S. and international systems of tax dodging and financial secrecy that exacerbate inequality, lead to corruption and undermine our national security, democracy, and tax base," said Ian Gary, Executive Director of the Financial Accountability and Corporate Transparency (FACT) Coalition. "Without heeding the calls of developing countries to more equitably share in the revenues raised by implementation of the agreement, though, the political viability of a final agreement over time may be in doubt."
The Framework comes on the heels of the Pandora Papers being released by an investigative journalist consortium over the weekend, exposing anew the ways in which the very wealthy, world leaders, and MNEs are able to participate in a separate and secretive "offshore" financial economy. This facilitates tax evasion, corruption, and illicit financial flows, and robs governments of the funds needed to respond to global challenges like persistent inequity, climate change and the COVID-19 pandemic.
"The world can't have two systems - one for hardworking people who pay their taxes, and the other for the global rich and multinational corporations who don't," said Gary. "Multinationals and global elites are using offshore financial secrecy and perverse results of a global tax race to the bottom to dodge taxes and escape accountability, and it's encouraging to see collective action that addresses these concerns."
Friday's Framework advances an earlier, incomplete framework from July that 136 of 140 Inclusive Framework jurisdictions have joined, including early holdouts Ireland, Estonia, and Hungary. Among other open questions answered from July, the Framework indicates that 25% of the excess profits (that is, in excess of profit margins of 10%) of the world's largest MNEs will be reallocated among market jurisdictions to afford taxing rights based on the location of consumption or use of goods or services under Pillar 1. Local digital service taxes must be removed and no new such taxes may be implemented until the earlier of 2024 or the implementation of Pillar 1 via a multilateral convention.
Further, the Framework more definitively creates a 15% minimum global corporate tax rate for large MNEs under Pillar 2 (removing language from the July framework that indicated a rate of "at least" 15%). The minimum tax works by allowing headquarter countries of MNEs to impose a "top-up" tax on low-taxed income of constituent entities on a country-by-country basis (called, the Income Inclusion Rule or IIR), and it is made clear that the U.S. global intangible low-taxed income (GILTI) tax will likely not comply with this standard unless it is amended to apply on a country-by-country basis (as is currently being proposed by the President and the Build Back Better Act). An undertaxed payment rule (UTPR) denies deductions or requires an equivalent adjustment for low tax income of a constituent entity that is not subject to tax under an IIR, and is subject to certain extended transition periods for MNEs with more limited foreign activities. Additional details were also provided with respect to the substantive carveout provided under Pillar 2 for tangible assets and payroll activities in relevant jurisdictions.
Additionally, the separate treaty-based subject to tax rule rate (STTR) was set at 9%, allowing paying (source) jurisdictions to impose limited top-up taxation on certain undertaxed related party payments. It remains unclear if these payments will include payments for services and capital gains. Remaining open under both Pillar 1 and Pillar 2 are many important technical questions necessary to implement the Framework, such as with respect to determining tax base.
Broadly unaddressed by the Framework are concerns raised regarding the participation and benefit of the process afforded to developing nations. In September, the G-24, voiced their extreme frustration with the process and July framework, demanding among other items: a higher allocable amount of profits to market jurisdictions under Pillar 1; a higher global minimum corporate tax rate than 15% under Pillar 2; clearer and broader source-taxing rights under the Pillar 2 STTR, which remain largely unaddressed by the Framework (and which would otherwise primarily benefit MNE headquarter countries, including G-7 members such as the United States); and flexibility in immediately abandoning local digital service taxes that the OECD is seeking to bar as part of the Framework. A lack of transparency around the process has also been raised as a concern for the many nations impacted by the agreement that are not necessarily afforded the same level of participation as G-7 and G-20 nations. Key G-24 members Nigeria and Kenya have not yet joined the Framework.
Concerned civil society organizations have encouraged developing nations to consider abandoning the deal and the process, or at minimum, to seek greater electability into or out of the Framework and assurances that efforts to improve transparency around the process and its overall revenue benefits will continue.
"We are grateful for President Biden's and Treasury Secretary Yellen's leadership in advancing these negotiations but support the equity and sustainability concerns raised by the G-24," said Gary. "Given the collective challenges driving this international agreement, it is essential that the Framework be equitable and politically viable over the long-term." The OECD has previously indicated that it is targeting the end of October 2021 to formally finalize this Framework. To achieve this ambitious goal, G20 Finance Ministers are scheduled to meet October 12 and 13 to continue to advance the Framework in anticipation of the meeting of G20 heads of state scheduled for October 30-31 in Venice, Italy. Then, governments will go about with the potentially politically challenging (and varied) acts necessary to implement any final Framework by 2023, other than with respect to the UTPR under Pillar 2, which would generally be implemented in 2024.
The Financial Accountability and Corporate Transparency (FACT) Coalition is a non-partisan alliance of more than 100 state, national, and international organizations working toward a fair tax system that addresses the challenges of a global economy and promoting policies to combat the harmful impacts of corrupt financial practices.
(202) 827-6401LATEST NEWS
US Voter Registrations Surge as Republicans Try to Limit Ballot Access
One group said it has registered over 100,000 new voters since U.S. President Joe Biden dropped out of the 2024 race.
Jul 26, 2024
The group behind a popular get-out-the-vote technology platform said Friday that it's registered more than 100,000 new U.S. voters since President Joe Biden withdrew from the 2024 presidential race, a surge that came amid mounting Republican efforts to make it harder to register and vote.
Vote.org said that 84% of voters registered in the new wave are under age 35. Nearly 1 in 5 new registrees is 18 years old. Andrea Hailey, the group's CEO, said that "since 2020, we have led the largest voter registration drive in U.S. history," with more than 7.8 million people registered.
After dropping out, Biden endorsed Vice President Kamala Harris to face former Republican President Donald Trump and Sen. JD Vance (R-Ohio) in the November election. The new presumptive Democratic candidate has already earned endorsements from many Democrats in Congress and groups advocating on issues including climate, labor, and reproductive rights.
Vote.org's success comes as Republicans at the federal level are proposing and passing legislation creating obstacles to the ballot box.
Earlier this month, U.S. House Republicans passed Rep. Chip Roy's (R-Texas)
Safeguard American Voter Eligibility (SAVE) Act, which would require proof of American citizenship to vote in federal elections. Republicans claim the bill is meant to fix the virtually nonexistent "problem" of noncitizen voter fraud.
However, Rep. Summer Lee (D-Pa.)
slammed the bill as a "xenophobic attack" meant to silence "Black voices, brown voices, LBGTQIA+ voices, [and] young voices."
Lee said the SAVE Act underscores the need to pass her recently introduced Right to Vote Act, "which would establish the first-ever affirmative federal voting rights guarantee, ensuring every citizen may exercise their fundamental right to cast a ballot."
Earlier this year, U.S. Senate Democrats also reintroduced the John R. Lewis Voting Rights Advancement Act, legislation its sponsors say will "update and restore critical safeguards of the original Voting Rights Act."
Meanwhile, Republican-controlled state legislatures and red-state governors are enacting laws imposing tough restrictions on voter registration, with violations punishable by stiff fines that critics say are meant to dissuade people from registration drives and similar efforts.
Again under the guise of preventing fraud, Republican Florida Gov. Ron DeSantis last year signed legislation limiting voter registration drives, with fines of up to $250,000 for violators.
"These draconian laws and rules are like taking a sledgehammer to hit a flea," Cecile Scoon, an attorney and president of the Florida chapter of the League of Women Voters,
toldThe New York Times in an article published Friday.
Three years after Kansas passed a law making "false representation" of an election official a crime, campaigners say it's become extremely difficult to sign up new voters.
"In 2020, even with the pandemic, we had registered nearly 10,000 Kansans to vote. Now, we haven't been able to register anyone," Davis Hammet, president of the youth voter mobilization group Loud Light, told the Times.
In Louisiana, Republican state lawmakers quietly passed legislation making it easier for election officials to toss out absentee ballots with missing details, limiting how people can mail in other voters' ballots, and restricting the ability to assist people with disabilities with their ballots.
"What we've found is that these measures have a disproportionate impact on voters with disabilities, both Black and white," NAACP Legal Defense Fund senior policy counsel Jared Evans
toldNola.com earlier this week.
"It's clear that their goal is to make it harder to vote, harder for specific communities to vote especially," Evans added. "What they don't realize is that these laws hurt white voters, too."
In Nebraska, Republican Secretary of State Bob Evnen last week
ordered county election offices to stop registering voters with past felony convictions who have not received official pardons. The move came after the state's unicameral Legislature passed a bill granting voting eligibility to felons immediately after they have completed their sentences instead of waiting two years.
"We refuse to accept thousands of Nebraskans having their voting rights stripped away," ACLU of Nebraska legal and policy fellow Jane Seu said in a statement. "We are confident in the constitutionality of these laws, and we are exploring every option to ensure that Nebraskans who have done their time can vote."
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Critics Warn Manchin-Barrasso Permitting Bill 'Is Taken Straight From Project 2025'
"You thought Project 2025 was just a threat after the election? It's actually happening *right now,*" said one climate campaigner.
Jul 26, 2024
Climate and environmental defenders on this week implored U.S. senators to block a permitting reform bill introduced this week by Sens. Joe Manchin and John Barrasso that campaigners linked to Project 2025, a conservative coalition's agenda for a far-right overhaul of the federal government.
Common Dreamsreported Monday that Manchin (I-W.Va.) and Barrasso (R-Wyo.)—respectively the chair and ranking member of the Senate Energy and Natural Resources Committee—introduced the Energy Permitting Reform Act of 2024.
The Natural Resources Defense Council (NRDC) noted that although the proposal "includes several positive reforms for the accelerated development of transmission projects," it also advocates "limiting opportunities for communities to challenge projects, loosening oversight for drilling and mining projects, extending drilling permits and fast-tracking [liquified natural gas] permits, and several other provisions friendly to fossil fuel giants."
"This dangerous bill doesn't deserve a floor vote."
These are nearly identical policies to what's proposed in Project 2025's Mandate for Leadership. The plan, which was spearheaded by the Heritage Foundation, calls for "unleashing all of America's energy resources," including by ending federal restrictions on fossil fuel drilling on public lands; limiting investments in renewable energy; and rolling back environmental permitting restrictions for new oil, gas, and coal projects, including power plants.
While Manchin has been trying—and failing—to pass fossil fuel-friendly permitting reform legislation for years, Brett Hartl, director of public affairs at the Center for Biological Diversity, said that his "Frankenstein legislation is taken straight from Project 2025, and it's the biggest giveaway in decades to the fossil fuel industry."
Hartl said the bill "deprives communities of the power to defend themselves and gives that power to Big Oil by making it harder for communities to challenge polluting projects in court," and "prioritizes the profits of coal barons over public health."
"And it mandates oil and gas extraction in our oceans," he continued. "The insignificant crumbs thrown at renewable energy do nothing to address the climate emergency."
"Monday was the hottest day in recorded history," Hartl noted. "It's shocking that as the climate emergency continues to break records around us, the Senate continues to fast-track the fossil fuel expansion that is killing us. This dangerous bill doesn't deserve a floor vote."
Hartl added that "to preserve a livable planet," Senate Majority Leader Chuck Schumer (D-N.Y.) "must squash this legislation now."
Manchin—who has said this will be his last term in office—has been a steadfast supporter of the fossil fuel industry, partly because his family owns a coal company. The senator says his permitting reform bill "will advance American energy once again to bring down prices, create domestic jobs, and allow us to continue in our role as a global energy leader."
However, Allie Rosenbluth, Oil Change International's U.S. manager, warned Thursday that "this bill is yet another dangerous attempt by Sen. Manchin to line the pockets of his fossil fuel donors, sacrificing communities and our climate along the way."
"Don't be fooled: The Energy Permitting Reform Act is another dirty deal to fast-track fossil fuels above all else," she continued. "It would unleash more drilling on federal lands and waters, unnecessarily rush the review of proposed oil and gas export projects, and lift the Biden administration's pause on new LNG exports."
"We urge Congress to reject this proposal and commit to action that protects frontline communities from the impacts of fossil fuel development and the climate crisis," Rosenbluth added.
"Don't be fooled: The Energy Permitting Reform Act is another dirty deal to fast-track fossil fuels above all else."
NRDC managing director of government affairs Alexandra Adams said Wednesday that "this bill is a giveaway for the oil and gas industry that will ramp up drilling and environmental destruction at a time when we need to be putting a hard stop to fossil fuels."
"We cannot afford to roll back so many of our bedrock environmental and community legal protections and offer a blank check to the oil and gas industry," she stressed. "We need new solutions for permitting if we are going to meet our clean energy potential and address the climate challenge. But this is not it."
"This bill would altogether be a leap backward on climate, health, and justice if passed into law," Adams added. "The Senate should reject it and look toward alternative solutions already being considered."
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'Nothing To Eat': War-Torn Sudan Faces Mass Famine as Military Delays Aid
Both parties in Sudan's civil war are to blame for a looming mass famine, experts say, and the military's blocking of U.N. aid at a border crossing with Chad exacerbates the problem.
Jul 26, 2024
Sudan's military is blocking United Nations aid trucks from entering at a key border crossing, causing severe disruptions in aid in a country that experts fear may be on the brink of one of the worst famines the world has seen in decades, The New York Timesreported Friday.
The border city of Adré in eastern Chad is the main international crossing into the Darfur region of Sudan, but the Sudanese Armed Forces (SAF), the state's official military, which is engaged in a civil war with a paramilitary group called the Rapid Support Forces (RSF), has refused to issue permits for U.N. trucks to enter there, as it's an RSF-controlled area.
U.S. and international officials have issued increasingly alarmed calls for steady aid access to help feed the millions of severely malnourished people in Darfur and other areas of Sudan.
Last week, Linda Thomas-Greenfield, the United States ambassador to the U.N., said that the SAF's obstruction of the border was "completely unacceptable."
Both warring parties in Sudan continue to perpetrate brazen atrocities, including starvation of civilians as a method of warfare. This piece focuses on the SAF's ongoing obstruction of essential aid. The situation is catastrophic. The policy is criminal. https://t.co/FKhqQh3EI9.
— Tom Dannenbaum (@tomdannenbaum) July 26, 2024
The Sudanese who've made it out of the country and into Adré reported dire and unsafe conditions in their home country.
"We had nothing to eat," Bahja Muhakar, a Sudenese mother of three, told the Times after she crossed into Chad, following a harrowing six-day journey from Al-Fashir, a major city in Darfur. She said the family often had to live off of one shared pancake per day.
Another mother, Dahabaya Ibet, said that her 20-month-old boy had to bear witness to his grandfather being shot and killed in front of his eyes when the family home in Darfur was attacked by gunmen late last year.
Now the mothers and their families are refugees in Adré, where 200,000 Sudanese are living in an overcrowded, under-resourced transit camp.
In addition to those that have made it out of the country, there are 11 million people internally displaced within Sudan, most of whom have become displaced since the civil war began in April 2023.
An unnamed senior American official told the Times that the looming famine in Sudan could be as bad as the 2011 famine in Somalia or even the great Ethiopian famine of the 1980s.
In April, Reutersreported that people in Sudan were eating soil and leaves to survive, and The Washington Postcalled it a nation in "chaos," reporting that World Food Program trucks had been "blocked, hijacked, attacked, looted, and detained."
In late June, a coalition of U.N. agencies, aid groups, and governments warned that 755,000 people in Sudan faced famine in the coming months.
The U.S. last week announced $203 million in additional aid to Sudan—part of a $2.1 billion pledge that world leaders made in April, which some countries have not yet delivered on.
Some officials including Thomas-Greenfield, who has dubbed the situation in Sudan "the worst humanitarian crisis in the world," have called for the U.N. Security Council to allow aid delivery into the country even in the absence of SAF approval; it's believed that Russia would veto such a measure.
Sudan's civil war has seen a great deal of international interference. Amnesty International on Thursday published an investigatory briefing showing that weapons from Russia, China, Serbia, Turkey, Yemen, and the United Arab Emirates (UAE) had been identified in the country. And The Guardian on Friday reported that the passports of Emirati citizens had been found among wreckage in Sudan, indicating the UAE may have troops or intelligence officers on the ground, though the UAE denied the accusation.
The International Service for Human Rights on Friday warned that both the SAF and RSF were engaged in wrongful killings and arrests, especially targeted at lawyers, doctors, and activists. The group called for an immediate cease-fire.
The SAF and Sudanese government figures have cast doubt on international experts' claims about famine in the country.
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