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30 Apr 2015

Bjørn Lomborg, Copenhagen Consensus Center, on Huffington Post Blog

Economist calls for illicit financial flows to be part of post-2015 goals & ensure tax revenue is invested in development

"Curbing Illicit Financial Flows: How to raise $770bn for African Development", 29 Apr 2015

If we think about development priorities for the next 15 years - with the Millennium Development Goals expiring this year, adequate nutrition and basic education immediately come to mind. Illicit financial flows (IFF) would not be top priority, but in a paper for…the Copenhagen Consensus Center, economist Alex Cobham argues that they are important enough to be included in the post-2015 goals…[I]n some countries as multinational companies have...minimized their tax liabilities by being registered in a low-tax country and declaring their profit there while in practice doing most of their business elsewhere. The lost tax revenue could have been invested in development, including into education, healthcare, or infrastructure improvements. While public exposure is often enough for companies to change practices to protect their reputation, Alex Cobham…suggests…to ensure that there is automatic exchange of tax information between jurisdictions and require multinationals to report on a country-by-country basis. This transparency should greatly reduce illicit transfers…