The international tax system has a large number of loopholes. Countries are losing hundreds of billions of dollars each year due to erosion of the corporate tax base and the movement of profits by multinational corporations. Both rich and poor countries are suffering as a result.
The countries and citizens of the EU are losing up to 190 billion euros each year due to the movement of profits to tax havens. As a result, the poorest countries in the world are losing 160 billion dollars a year in corporate tax revenue, an amount that exceeds annual global development aid.
The movement of profits, non-transparent tax agreements, the abuse of tax incentives and obscured ownership structures all lead to the erosion of tax bases in rich and poor countries alike.
The amount money available for affordable and quality public services and infrastructure is reduced, social cohesion and confidence in institutions crumbles, and faith in the fairness of the rules of the world in which we live declines. This situation can be exploited by populists, further contributing to instability.
Although the reforms proposed by the G20 and the Organisation for Economic Co-operation and Development (OECD) are a move in the right direction, they have many shortcomings. One of the greatest is that they do not equally include developing nations in the debate over new international tax rules.
In cooperation with domestic and international partners, Glopolis is attempting to find a solution to this problem by informing the public of the issue of international taxes, supporting the increased transparency of the international tax system, by conducting a critical analysis of tax reform in the area and by moderating a discussion between relevant actors.