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Oral Statement for CSocD 51,by Celine Paramunda the  representative  of Society of Catholic Medical Missionaries, an Ngo in special consultative status with ECOSOC. Our members are present in 5 continents involved in achieving health and other MDGs .

 Madam Chair, distinguished delegates,ladies and gentle men,

 Mahatma Gandhi’s words are relevant even today, ‘the world has enough for everyone’s need, but not enough for everyone’s greed”. One of the main challenges for social development is lack of resources/revenues to the governments. In order to tackle poverty, we need to address some of its root causes.  Third World Resurgence 2012 gives us following evidences where the money is going and where our attention needs to be focused to.

Last Nov members of the British Parliament were shocked at a report by Reuters that the Starbucks chain had paid no corporate income tax over the previous 3 years despite sales of1.2 billion pounds in the UK. The media in the UK also reported that Google had paid only 3.4 million pounds as taxes for their sale of 2.5 billion pnds. The internet company Amazon had paid no taxes for their  3.3 billion sales in UK. These are just a few examples of the way how Trans National Corporations (TNC) manipulate the resources which are meant for social development in a country, public services like health, education and social security for its vulnerable people.

Some of these companies are using false accounting methods to avoid taxes and transfer profits; for example, Amazon collects its UK sales in Luxenburg where the taxes are only  2.5% .Google collects it profit in Ireland and sends it to the tax haven of Bermuda, via The Netherlands. These accounting practices are robbing the governments of the tax revenues at the cost of local business.

Briton, one of the powerful countries of the world has found a way to confront these companies with facts and figures and hold them accountable. Think of the African countries such as Angola, Nigeria, Republic of Congo, Gabon, all have massive oil reserves and would have earned billions as revenues but  majority of its people remain impoverished.  A research by Leonce and James Boyce of the University of Massachusetts found that resource -rich African countries lost enormous assets over the past several decades. From 1970-2008 Nigeria lost US$ 296 bn to illegal capital flight; Angola lost about $71bn from 1985-2008.  The Washington based Global Financial Integrity (GFI) projects estimates that up to US$1 triln has been shifted out of Africa over the last 3 decades. Trade mispricing by TNCS accounts for 60-65% of this. The GFI also investigated illegal financial out flows from 48 Least Developed Countries (LDC) from 1990-2008 as $197 bn. In 2009 Christian Aid calculated trade mispricing by TNCs cost the worlds 48 LDCs $160 bn a year. Remember these are several times more than the Official Development Assistance (ODA) they receive from the advanced countries.

Madam Chair,

A 2012 report of the Tax Justice Network estimated that $21- 32 trillion of the financial wealth of people from 139 law-Middle income countries has been channeled through offshore secrecy jurisdiction, resulting in global tax loss of $200 bn every  year.

We the SCMM urge the UN and Member States to take steps to:

  • Stop the  illegal capital flow from least developed and developing countries
  • Revisit the international tax systems developed in the 1960 to avoid harmful tax practices.
  •   Institute tax reforms to increase the national revenue for social development & other public services.
  • Accept and implement the double taxation system proposed by the UN as well as Financial Transaction Tax.
  • Close all loopholes in taxation including Tax evasion by Trans National Companies.

Poverty can not be eradicated, unless there are just policies and operational systems in place. The growing inequalities and the struggle of people to survive is not only an injustice but also a threat to the National and global security. If countries increase their investment in social protection rather than increasing the military budget, our world would be safer.   People look upon the UN as their last hope for a better future for them and for the coming generations and the UN cannot afford to disappoint them.

In conclusion, we reiterate the words of wisdom of Mahatma Gandhi “an ounce of practice is worth more than tons of preaching”.

I thank you for your kind attention .

Celine Paramundayil  MMS                 Feb 12, 2013