REACTING to the G20 FMs echoing the call by the G8 countries at Lough Erne to rapidly move to a system of automatic exchange of tax information, the GFI has called it a praiseworthy move essential to cracking down on international tax evasion. As with the G8, the G20 finance ministers offered to provide support to poorer countries as they move to adopt the “new, global standard,” likewise eliciting support from GFI. However, the Washington-DC based research and advocacy organization expressed disappointment in the G20’s failure to embrace tax transparency for multinational corporations and the finance ministers’ reticence to meaningfully address the issue of phantom firms.

According to GFI’s research, tax haven secrecy, anonymous shell companies, and trade-based money laundering facilitated the illegal outflow of roughly $261 billion from the Greek economy in the lead-up to the European debt crisis, and tax haven abuse is estimated to cost U.S. taxpayers roughly $150 billion per year.

Despite the organization’s praise for the G20’s comments on tax information exchange, GFI noted that the finance ministers fell short on tackling tax avoidance by multinational corporations. For years, GFI has recommended requiring multinational companies to publicly disclose revenues, profits, losses, taxes paid, and staff levels on a country-by-country basis as a necessary transparency measure to expose and dissuade abusive tax avoidance.

“While we welcome the attention that the G20 and OECD have given to corporate tax avoidance, we’re very disappointed that the G20 failed to recommend public country-by-country reporting for multinational companies,” said GFI Managing Director Tom Cardamone.