Friday, August 30, 2013

Diabetes and CKD - Pitfalls: Estimating GFR

The routine use of estimating equations for GFR has revolutionized the way that we view renal disease over the last 15 years and although some argue that this has lead to overdiagnosis of CKD, I believe that this has been an extremely positive development both in clinical and research terms. One criticism of the MDRD equation in particular was that it did not perform well in patients with near normal GFR and the CKD-Epi equation was introduced, at least in part, because of this limitation. However, there remain concerns that in patients with diabetes, particularly in those with hyperfiltration, this formula still does not perform sufficiently well.

To answer this question researchers in Italy took patients from two clinical trials who had serial measured GFR for up to 8 years and compared the results with simultaneous estimates of GFR using the 14 different equations. Of the 600 patients included, 15% were hyperfiltering and 13% had a reduced GFR. Overall, all but one of the equations underestimated GFR in the group as a whole. The single equation that overestimated GFR (Ibrahim) tended to overestimate at all levels. The range of differences between the mGFR and eGFR was -40 to +20 ml/min/1.73m2 and the mean percent error (MPE) ranged from -28.14 to 0.98%. Not unexpectedly, the majority of the error was related to underestimation of GFR in patients with hyperfilatration (MPE -12.8 to -36.7%). It is notable that the MPE was lowest in participants with hyperfiltration using the CKD-Epi equation. In this group, the mean mGFR was 132 ml/min/1.73m2 while the mean eGFR ranged from 83-114 ml/min/1.73m2.

The bias was far lower for the normofiltration and low GFR groups. Because the authors had longitudinal data also, they were able to look at the ability of the formulas to measure GFR decline over time. Given that all of the equations underestimated GFR at baseline, it is unsurprising that there was systematic underestimation of GFR decline over time, particularly in the patients with hyperfiltration. This was less marked in the patients with CKD at baseline. Five of the equations actually estimated that GFR was increasing in the patients despite a consistent decline in mGFR.

This is all not to say that these formulas are not useful. It is always important to recognize the limitations of your tools and one of the major issues here is that creatinine is used as the marker of kidney function with all of the limitations that this introduces. It should also be said that although the agreement with mGFR might not be great, we know from large EPI studies that an eGFR of less than 60 ml/min/1.73m2 is associated with poorer outcomes and this is true no matter what the cause of the disease. The take home from this is that it is not possible to accurately diagnose hyperfiltration in diabetic patients without over nephropathy using current creatinine-based estimating equations and that other signs should be taken into account when assessing these patients.

(Click on images to enlarge)

Links Aug 30

U.S., Switzerland forge bank settlement deal amid tax probe Reuters

Report sees bleak future for Swiss private banks swissinfo

Wooing The Wealthy Gulf Business News
A focus on Dubai, with insights into general trends in private banking. See also: Private banking changes courting strategy for Asia gulfnews and: UBS Has Relationship With 80% of Asia’s Billionaires Bloomberg

Businesses Increasingly Looking To 'Major' Offshore Centers Tax-News

The bizarre tax loophole that could save Vodafone £24 billion Quartz

India awaiting Mauritius response for tax treaty revision Business Standard

Tax transparency: where do Swedish corporations with operations in developing countries pay taxes? Diakonia / Swedwatch
In a recent report, Swedwatch has examined how four Swedish multinational companies think and act regarding tax payments in Zambia.

Berlusconi masterminded tax evasion plan, Italian court says Reuters

Tax haven sees 86% rise in yuan flows  South China Morning Post
"Luxembourg has become the second-largest country to settle yuan payments in Europe after France, with more and more yuan capital flowing to the tax haven as Chinese firms rush to set up headquarters there."

Bill Black: Zero Prosecutions of Elite Banksters is Too Many for the Wall Street Journal naked capitalism

JPMorgan Bribe Probe Said to Expand in Asia as Spreadsheet Is Found Bloomberg
See also: Damn you, Excel spreadsheets, JP Morgan Chase edition Quartz

Jersey: finance industry is now effectively overseeing the police force

We just blogged (again) about Cyprus as the quintessentially 'captured state' - and now we provide what is perhaps an equally striking example of 'state capture' in the British tax haven of Jersey. Tipped off by Tax Research and the blog of controversial, outspoken Jersey ex-Senator Stuart Syvret, we now see this from Jersey Channel TV a couple of days ago:
"Advocate Jonathan White has been appointed the first chairman of the Jersey Police Authority.

The JPA is responsible for ensuring the police are an effective force.

Advocate White, who is an English solicitor and a Jersey advocate, will be responsible for the oversight of the States of Jersey Police and ensuring they deliver their key aims and objectives.

Advocate White is a former managing partner and group chairman of Ogier. During his time at the firm, Ogier grew from a law firm into an international fiduciary services business with a presence in nine jurisdictions and a staff of 850 people. He retired in 2009. He is currently chairman of both Jersey Finance Ltd and Durrell Wildlife Conservation Trust. In 2011, he was awarded a lifetime achievement award from the Citywealth Magic Circle awards."
Our emphasis added. So, in effect, the police force is going to be overseen by the Jersey tax haven industry. While White was in top positions at Ogier, it should be noted, a number of scandals happened. Such as this one (more here, involving Michael Birt, then attorney general and current Bailiff, also from Ogier).

TJN's director John Christensen, along with co-author Prem Sikka, Austin Mitchell, Philip Morris and Stephen Filling have been talking about state capture in Jersey for many, many years. For instance, their seminal and painstakingly documented 1998 case study No Accounting for Tax Havens noted, among other things:
"Jersey has never had a general election. Its government is captured by big business. . . . It is captured by the finance industry."
Treasure Islands takes this further, drawing on this case study and making comparisons with Delaware, to show exactly the same phenomenon happening in two very different jurisdictions, many miles apart, in different eras. That phenomenon is, of course, state capture, and it's a generic feature of offshore finance - and indeed of any jurisdiction whose financial sector becomes too large.

Appointing the finance industry to oversee the police. You couldn't make it up. One more for the Finance Curse analysis.

Oh, but there's more. From Syvret, who first learned of this through an interview on the local Jersey BBC outlet.
"I rarely listen to the BBC in Jersey, knowing through years of first-hand - and evidenced - experience just how biased and collusive with the local oligarchy the BBC in Jersey is"
State capture again. Finance Curse again. And, regarding that interview:
"The interviewer could have been scripted by States of Jersey spin-doctors. And let’s face it, probably was. For example - this is the BBC - which has in its possession a 94 page interim statement to the Wiltshire police by the unlawfully suspended Police Chief Graham Power. This document contains so many profoundly important issues – and raises so many serious public-interest matters – that it could keep a serious broad-sheet newspaper in detailed stories for months.

I know that the BBC have this document – because it was me who gave it to them, after I obtained it from sources."
And if you want to read that document, take a look here. But for some reason, the Jersey BBC has never touched it. Read Syvret's angry but informative piece. As if any further evidence were needed.

Thursday, August 29, 2013

Links Aug 29

Swiss Agree on Program for Banks to Settle U.S. Dispute Bloomberg
See also: U.S. And Swiss Reach Deal On Evaders---More Guilty Pleas Over Offshore Accounts Forbes

Jersey, Bermuda and BVI on new official French tax haven blacklist Les Echos (In French). The blacklist is here. France blacklisted them because they wouldn't satisfactorily comply with French laws.

Pakistan reports big rise in tax revenues as reforms kick in Reuters. This is a big deal, especially in light of this.

Nearly Five Years After the Financial Meltdown, Support for Wall Street Reform Remains Strong Americans for Financial Reform. Public support remains the greatest hope.

Argentina: Where vultures dare Al Jazeera
"Vulture funds" seeking payment from Argentina have won a major court victory, setting a dangerous precedent.

Bangladesh: Transfer pricing law to be enforced from June next The Financial Express

India Drafts Safe Harbor Policy to Reduce Transfer Pricing Disputes India Brief

Russia: Companies may be obliged to provide information on offshore status RAPSI
Offshore centres give ground to onshore: BCG report International Adviser

Isle of Man Signs Tax Agreement With Switzerland Tax-News
Just how much use will this be? And, behind the times - see here and here.

Amazon takes tax fight to Supreme Court Financial Times (paywall)

Executive Excess 2013: Bailed Out, Booted, and Busted Institute for Policy Studies

Shake-up looms in Singapore banking, wealth managers warn Financial Times (paywall)
See also comment on Tax Research UK

Time to end the dangerous shell game The Hill

What really happens when journalists meet Thomson Reuters
"If the Thomson Reuters Foundation advanced finance and governance course were a trending topic on Twitter, the key words would be ‘Tax Havens’, ‘Tax Avoidance’, ‘Multinationals’ and the majestic continent of Africa."

Notenstein Emerges From Dark Shadow of Wegelin Bank The Wall Street Journal

Liechtenstein bank reports US tax deal hits profits France 24 / AP

Quote of the day: Cyprus and state capture

From the New York Times, our quote of the day (in bold), one in an occasional series:
Whoever controls the Bank of Cyprus controls the island,” said Andreas Marangos, a Limassol lawyer whose clients include many Russians.
We mention this for two reasons. First, the story itself is interesting. The first three paragraphs give the flavour:
"When European leaders engineered a harsh bailout deal for this tiny Mediterranean nation in March, they cheered the end of an economic model fueled by a flood of cash from Russia. Wealthy Russians with money in Cyprus’s sickly banks lost billions.

But the Russians, though badly bruised, are now in a position to get something that has previously eluded even Moscow’s most audacious oligarchs: control of a so-called systemic financial institution in the European Union.

“They wanted to throw out the Russians but in the end, they delivered our main bank to the Russians,” said the Cypriot president, Nicos Anastasiades, in a June interview."
The story isn't quite as simple as these paragraphs suggest, of course: among other things, the "Russian" ownership stake seems to be fairly dispersed, at least at this point. But there's another issue we want to point to, which is the main point of this blog. It's that this provides yet another example of the extreme forms of 'state capture' which we have seen, again and again, in small islands with large financial sectors: tax havens. The NYT story continues:
"Despite its wobbly condition, the Bank of Cyprus still holds a uniquely influential position in the economic and political affairs of a sun-swept nation that sits on potentially large reserves of natural gas and straddles strategic fault lines between East and West.

President Anastasiades, in a June letter to the European Central Bank that pleaded for help to keep the Bank of Cyprus afloat, described it as a “mega-systemic bank” that, if it failed, could bring down the entire Cypriot economy. With 5,700 employees and around half of all the island’s deposits, it dwarfs its rivals and reaches into every corner of the country."
Particularly thanks to David Officer and Yiouli Taki at the University of Nicosia, we already had plenty of information of the "capture" of Cyprus by the offshore financial services sector - see here and here and here. This blog is a reminder, and a confirmation, of one of the most important political-economic phenomena in the modern global economy.

Let's not forget, whoever has this kind of influence will be able to change the laws, to turn Cyprus into whatever kind of tax haven or secrecy jurisdiction that they want.

Much more on this broad issue in Treasure Islands and in our Finance Curse e-book.

IMF paper points to 'no taxation without representation' aspect of Resource Curse

A new Working Paper from the IMF notes in its abstract:
This paper asks whether the availability of higher resource revenue in these countries has led to lower taxation effort of other revenue categories. The question is analyzed both in terms of the relationship between non-resource tax revenue and resource revenue, and between non-resource tax revenue and statutory tax rates. The paper finds evidence suggesting that nonresource revenue is negatively influenced by a higher resource revenue-to-GDP ratio. The lower take up of nonresource taxes in resource-rich countries is correlated with higher levels of corruption in these countries, suggesting weaker institutions affect nonresource revenue through incentives for tax evasion and/or large tax exemptions as argued in the literature.
No great surprise there, but it's always useful to get confirmation of things. In short, wading through the IMF-speak, the researchers have found that countries rich in natural resources tend to see weaker efforts to raise taxes from other sectors, and this lack of tax 'effort' is correlated with greater corruption. This is an important driver for the so-called Resource Curse, a phenomenon that appears surprising on the face of it: countries rich in natural resources often perform worse than their resource-poor peers.

We have long pointed out that there are important links between taxes and representative, accountable government. As a 2008 book on the subject summarises:
"The political importance of taxation extends beyond the raising of revenue. We argue in this book that taxation may play the central (their emphasis) role in building and sustaining the power of states, and shaping their ties to society. The state-building role of taxation can be seen in two principal areas: the rise of a social contract based on bargaining around tax, and the institution-building stimulus provided by the revenue imperative. Progress in the first area may foster representative democracy. Progress in the second area strengthens state capacity. Both have the potential to bolster the legitimacy of the state and enhance accountability between the state and its citizens."
In an article for Tax Justice Focus a while back, Alex Cobham explored some further benefits from taxation, through what he calls the "Four Rs"
  • Revenue. Raising money for schools, hospitals, courts etc.
  • Redistribution. Spreading the benefits of development more widely.
  • Repricing. Tax can change behaviour: high taxes on tobacco, for instance, can discourage its use.
  • Representation. It is this fourth "R," of course, that is the key issue of this blog. Taxation strengthens and protects channels of political representation: when citizens are taxed, they demand representation in return from their rulers. Mick Moore's article in that edition of Tax Justice Focus has more .
The 2008 book also mentioned, however, this:
This idea is largely missing from the new scholarship on state-building. It is also largely missing from the practical concerns of those working in the aid community. The lack of attention to the relationship between revenue-raising and governance is surprising, especially given the long-standing linkage between taxation and governance assumed by students of European and American history.
So it's good to see the IMF paper contributing to a still relatively sparse field. Those interested in this general 'no taxation without representation' area are now encouraged to visit this research site. Their core messages are summarised:
"The ways in which governments are funded has very significant impacts on the quality of governance:

Governance is better where governments have to earn their incomes by taxing a wide range of citizens and economic activities. It is worse where governments can rely on large unearned levies on the proceeds of exporting oil, gas and concentrated mineral deposits. These unearned incomes are very significant for the governments of many poor and middle income countries.

Conversely, well-managed taxation systems can play a major role in state-building, by helping create the conditions for relatively negotiated and consensual political settlements between political elites and citizens."
And as for the Resource Curse, the next edition of Tax Justice Focus will contain an article dedicated to this very subject - along with a lot more information about the Finance Curse.

Veil thrown over Argentina's commercial registry

By our Guest Blogger.
Argentina’s Inspección General de Justicia (IGJ), which is in charge (among other things) of the Commercial Registry, has been under severe criticism for obstructing, delaying and even denying requests for public information. Violating relevant laws and regulations on access to information, and basing its case on an (unrelated) law to protect personal data, the IGJ has issued internal regulations requiring those requesting information contained in the Commercial Registry to demonstrate a “legitimate interest” in the information.

The blocking of information by the IGJ has been getting worse in recent years, as news organisations and opposition politicians have demanded information from the Public Registry with regard to companies related to Vice-President Amado Boudou, and to businessman Lazaro Baez, allegedly linked to President Kirchner.

In 2012 National Congress Member Gil Lavedra, after being denied access to the Commercial Registry, filed a summary proceeding (“amparo”) to obtain a court order to access information on Boudou’s companies from the Registry. After a lower Court refused, the Federal Court of Appeals in 2013 finally issued the order, reaffirming that there is no need to invoke or prove a “legitimate interest” to access information from the Registry. This court order, however, applies only to this particular case.

Against this background, an informal academic meeting took place last August 27th at the Law School of the University of Buenos Aires, to discuss the Public Information and the IGJ. Unknown to the panelists, however, the current Head of the IGJ, Luis Rodolfo Tailhade, was present. He is a member of La Campora, the youth and political movement related to Argentina’s President Cristina Fernandez de Kirchner (her son, Maximo Kirchner, chairs the movement). Contrary to the panelists’ view, Mr. Tailhade said that while the IGJ would comply with any court order, he personally agreed with existing IGJ’s internal regulations which demand a legitimate interest. In his opinion, the IGJ already takes care of supervising companies - and, he added, most companies wouldn’t want just anyone looking into their directors’ list of names or company balance sheets.

He was reminded that the very purpose of a “public” registry is to provide information to the public: that is, everyone. This includes not only banks, creditors and businessmen who need to look at a company’s balance sheet to assess its solvency and soundness, but also any regular citizen with regard to matters that relate to public officers and corruption, especially if the Vice-President of the country might be involved. However, many people at the meeting thanked him for attending and speaking openly, which is very unusual for a public officer in the present times.


Further background to this is available from Markus Meinzer in 2005, here

Wednesday, August 28, 2013

Links Aug 28

Africa: Extractive Sector Is Critical to Africa's Illicit Money Outflows - Mbeki allAfrica

India: Transfer pricing: I-T dept told to respond to Vodafone, Shell’s petitions livemint

Barbados: Two weeks before the G20 summit, offshore state capture still alive and well Financial Secrecy Media Monitor

Why regulatory actions and criminal investigations are good for OFCs Cayman Financial Review
Interesting piece by David Marchant of Offshore Alert

Release Of Offshore Records Draws Worldwide Response ICIJ

Offshore-Adviser Plea Marks a Shift in Tax Crackdown The Wall Street Journal

Swiss Banks agree plan to end US tax evasion row swissinfo

2 signs that secrecy is still good business: Cayman registration income up 50%; Citywealth mag preparing 2014 awards Financial Secrecy Media Monitor

Gun-Toting Woman Leads Philippines Tax Evasion Battle Bloomberg

Britain is fast turning into a Banana Republic, wilfully blind to corruption Ian Fraser's Blog
See also: The Saudi-GPT deal inquiry must not be another whitewash The Guardian

U.S.: IRS scrutinizes certain corporate buyouts involving debt CNN Money
"The next big private equity buyout will likely involve an offshore affiliate, a flurry of money exchanges, a lower tax bill, and higher returns. But the IRS is knocking."

Tuesday Tax Trade-off: Food for Low-income Families vs. Tax Subsidies for CEO Bonuses Americans for Tax Fairness
See also the fact sheet, Table of Tax Tradeoffs

Maximizing shareholder value: The goal that changed corporate America The Washington Post

Hedge Funds Win 2nd Circuit Court Ruling in NML Capital vs. Argentina; Global Poor Lose Jubilee USA

As world focuses on Manning and Miranda cases, developing nations are jailing journalists in record numbers ICIJ

Papua New Guinea money laundering Yahoo News
"They see Australia as the Cayman Islands. They see that it is the safest place where they can bring their stolen money from PNG."

Tuesday, August 27, 2013

China signs multilateral convention on tax matters - updated

Updated: August 28 with new details.

A press release just in from the OECD:
China signed the Multilateral Convention on Mutual Administrative Assistance in Tax Matters at a ceremony today at the OECD. All G20 countries have now fulfilled the commitment they made at the Cannes G20 Summit to sign the Convention and move towards automatic exchange of information as the new, global standard.
Read a TJN briefing paper on this convention, which is in fact a joint initiative by the OECD and the Council of Europe, here. In summary, we think that the Convention is a useful tool, with many positive aspects - though with a number of shortcomings too. Xinhua has its own shorter backgrounder here.

This is significant, because China has in the past seemed to have been rather wary of joining up with international initiatives on information exchange. And it's also significant because just two or three years ago, we at TJN felt as if we and only a very small band of others were lone voices in the wilderness, pushing as hard as we could against the OECD's line that it's nearly-useless 'on request' system of information exchange was the internationally accepted standard. Automatic information exchange was the way to go, we said, but we were dismissed as extremists. And now we have the OECD trumpeting:
"Tax authorities worldwide are moving from bilateral to multilateral cooperation and from exchange of information on request to automatic exchange of information. The Convention provides a comprehensive multilateral framework for such co-operation and complements other initiatives, such as the standardised multilateral automatic exchange model being developed by the OECD and its G20 partners."
This is good news, though (as we so often say) there is still a very long way to go on transparency and information exchange.

Some additional points about this are worth noting.

First, alhough 56 states have now signed the convention, only about half of these have actually ratified it - it seems from OECD data that 29 have not yet done so, so it's not in force yet for them yet.

Second: this is, generically, a far more effective method than bilateral treaties. If all 56 were to ratify this convention that would be the equivalent of 3,080 ratified bilateral treaties.

What is now needed is a Protocol to establish a template for automatic Exchange of Information; this convention allows for automatic exchange of information, but only once states have agreed the administrative arrangements for this. There is still much work to do in this area.

Links Aug 27

China signs up to G20 crackdown on tax evasion The Telegraph

Offshore finance: Trawling for business The Economist
"The Gambia looks to join a beleaguered club."

Tax evaders feel the heat in havens South China Morning Post
"Mainland and Hong Kong are under pressure to comply with FATCA to maintain competitive edge after the BVI and Caymans take steps in this direction" .

BVI in FATCA talks Tax-News

Russia’s offshore cash switches seas in search of a new tax haven Quartz
Reporting that BVI appears to have replaced Cyprus as the host of Russia’s offshore money.

Julius Baer Worker Jailed for Three Years for Breaking Secrecy Bloomberg Businessweek

Schäuble invites Swiss banks to Germany - without anything in return TJN Germany Blog (In German)
See also: UBS gives German tax cheats until end-2014 to own up Reuters

Switzerland: Reforms will lead to ʻmassiveʼ tax losses, cities warn swissinfo

Offshore centres race to seal Africa investment tax deals Financial Times (paywall)
"The surge in foreign investment in Africa has triggered a race among offshore financial centres to sign deals to reduce the tax bills of overseas companies and protect their investment on the continent, with Mauritius, Singapore and Luxembourg rushing to secure agreements."

African Union’s panel moves against illicit financial outflows The Guardian Nigeria

Mbeki leads team tracking illegal cash flows from DRC African Manager

Paradox of Tanzania gold As exports clock $7bn Dar gets only $303 in taxes IPP News

How Should Multinationals Be Taxed? Forbes

City of London: don’t tell anybody, but we are making lots of money again Treasure Islands

City Workers Deferred Bonuses To 'Avoid' 50p Tax Tax-News

Microsoft Bribe Probe Extends To Pakistan, Russia ValueWalk

3 Ways Drug Cartels Launder Their Money, Right In Front Of You policymic
Hat tip: Offshore Watch

World leaders and tax dodging: an Absence of Will

Update: the Financial Times has picked this up, here.

Guest blog by Joseph Stead, Christian Aid
The 10-point Lough Erne communique contained 13 uses of the word ‘should’ and not a single use of the word ‘will’.  Perhaps David Cameron, the UK Prime Minister, was hoping that no-one would notice the difference and that the British public anger about tax dodging would be satisfied without any actual action.  A new poll  commissioned by Christian Aid shows that that gamble has failed and that the British public remain as angry, if not more so, than before the G8.

When a previous poll was undertaken in February, 80% of the public were angry about tax dodging, and 34% were boycotting products because of companies’ tax practices.  The same percentage are still boycotting products - and 84% are now angry. 
While one of the G8 ‘shoulds’ was for tax authorities to get more information from multinationals, the public are clear that they expect more.  Our ComRes poll found that 87% want MNCs to be more transparent with their accounts.  Both companies and government are seen as complicit in the problem, with 83% saying that MNCs get treated more leniently by the tax man, while 58% think that tax avoidance by MNCs is immoral.

Furthermore, despite the pre-G8 commitments made by the UK’s Overseas Territories and Crown Dependencies, there is also clearly a desire for further reform in UK-linked jurisdictions.  Of the 2,028 Britons questioned, 74% agree with the statement that ‘the UK is responsible for these territories and should force them to make information about company ownership publicly available by using all available means.’

While I’d love to be able to say what the UK government response to this will be, I can only point out what our poll suggests it should be.

Cameron made transparency of company ownership a key part of the G8, and it’s not hard to understand why.  The Africa Progress Panel highlighted how the use of anonymous companies registered in the British Virgin Islands involved in just five mining deals in the Democratic Republic of Congo cost the citizens of the DRC $1.35bn, or more than twice their annual health and education budget combined. 

As Kofi Anan, former UN Secretary General and head of the Africa Progress Panel said: ‘When foreign investors make extensive use of offshore companies, shell companies and tax havens, they weaken disclosure standards…such structures also facilitate tax evasion and, in some countries corruption, draining Africa of resources that should be deployed against poverty and vulnerability.’
Cameron himself agrees, saying much the same: ‘A lack of knowledge about who ultimately controls, owns, and profits from companies leads to aggressive tax avoidance, tax evasion and money laundering, undermining tax bases and fuelling corruption across the world’. 

The public get it, too.  When asked why people might want anonymous companies, the leading answers were: for tax evasion and avoidance (78%), to hide their true wealth (70%) and to hide criminal behaviour (59%).

But having made company ownership transparency a key part of the G8, Cameron stopped short of doing what he wanted to. He said he personally supports a public register of the real owners of companies but when it came to the G8, he stopped just short of taking that step. 

He’s decided to have a consultation instead.  There is still a while to go before the consultation closes on 16th September, but the people we polled had a fairly clear view, with only 9% agreeing that the owners of companies have a right to privacy.

With the UK committed to establishing a registry, making it public should be a no-brainer, as some in the business world have agreed.  The extra cost would be minimal.  It would ensure that developing countries could access the information easily and quickly, without the need for treaties to allow exchange of information.  It would allow many eyes to analyse the data to spot both areas of concern and errors. 

Knowledge that there would be many eyes would also deter many from even trying.  It would also help make banks perform due diligence both quicker and more effectively and would be a first step in building back trust and confidence in businesses. That, in turn, would support both access to credit and the rebuilding of some of the social trust that business has lost in recent years.
All of this the government knows, indeed it has  known for years, because it did a comprehensive cost benefit analysis in 2002, which came out in favour of a public registry as the most cost effective option. 

The public is also clear that the UK should extend requirements for public registries to the Overseas Territories and allow the citizens of the DRC to see who controls the BVI companies that have stolen their money.
So, public registries are something that the Prime Minister wants, something that many in businesses support, something that the public want, something that would benefit developed and developing countries alike and also a means of to tackle corruption, tax evasion and money laundering. 
That we should do this seems entirely clear.  Whether the UK government will do it remains to be seen.

Joseph Stead is Senior Economic Justice Adviser at Christian Aid.  Christian Aid have just launched a new campaign in the UK  calling for public registries of beneficial owners

Illicit financial flows from Africa, in pictures

In May this year we reported on a new study by the African Development Bank and Global Financial Integrity, entitled Illicit Financial Flows and the Problem of Net Resource Transfers from Africa: 1980-2009. It complements TJN's research published last year estimating that there is $21-32 trillion sitting offshore, effectively out of the reach of tax authorities.

Now, from The Africa Report, a new article which revisits this theme, a picture of the haemorrage:

Click to enlarge. As The Africa Report notes:
"In the three decades from 1980 to 2009, African countries lost up to $1.4trn in illicit financial flows, known as capital flight.

"It's a staggering figure," says AfDB chief economist Mthuli Ncube. "Around $30-40bn is leaving the continent each year."
The Africa Report also carries a top story entitled Thirty Ideas Shaking Up Africa, with a heavy focus on technology. But it's not all about African tech. The first of the 30 ideas is . . . Tax Justice. 

Saturday, August 24, 2013

August Taxcast: Tax havens, Gibraltar, pollution, carbon tax

In the August 2013 Taxcast: We look at why development money is being invested in developing countries via tax havens and the under-reported elements of the tensions between Spain and Britain over the territory of Gibraltar.

Also: tax and the environment: making the polluter pay instead of paying the polluter.

The Taxcast investigates the Carbon Tax in British Columbia, Canada.

Download the August Taxcast here

Produced by @Naomi_Fowler (Also available on iTunes)

Friday, August 23, 2013

Quote of the day - on Napoleon and taxes

Another in an occasional series. From the Legal Post, our quote of the day is in bold (hat tip: @jthorndike)
William Pitt the Younger (Great Britain’s youngest prime minister at 24) introduced the first income tax in 1799, based on the nation’s fervour to fight France and Napoleon. He said it was necessary “to repress those evasions [of excise taxes] so disgraceful to the country, so injurious to those who honourably discharge their equal contribution, and, above all, so detrimental to the great advantage which it is intended to promote.” No political speechwriter has said anything new about tax avoidance ever since. 
Or, as we would put it, tax justice is based on timeless principles. The article contines:
The British supported Pitt’s income tax on the basis that it was better to lose some of their property to the government than to lose all of it to Napoleon.
Enough said, for now at least.

Wednesday, August 21, 2013

Don't Eat the Leaves

Hyperoxaluria is an important risk factor for kidney stones, approximately 80% of which are primarily composed of calcium oxalate. Hyperoxaluria is typically diagnosed by performing a 24 hour urine collection and levels above 45 mg/day are considered abnormal although, depending on the other urine constituents, the risk of CaOx stones increases when the urinary oxalate level is above 20 mg/dl. It is important to distinguish between hyperoxaluria that results from increased oxalate production (endogenous) and increased oxalate ingestion (enteric).

The classic disease associated with increased oxalate production is primary hyperoxaluria. There are 3 identified types although all result from defects in glycoxylate metabolism leading to oxalate accumulation. At first, the manifestations are primarily renal leading to nephrolithiasis and nephrocalcinosis. However, as the disease progresses,  the serum oxalate concentration increases eventually resulting in extra-renal oxalate deposition. Vitamin C is metabolized to oxalate also so that patients with oxalate-containing kidney stones should probably avoid excess vitamin C supplementation as this could increase the risk of stones.

Enteric hyperoxaluria results from increased absorption of oxalate in the large bowel. In general, there are 3 ways in which this might occur:
  • Increased dietary oxalate ingestion
  • Decreased dietary calcium intake - calcium binds oxalate in the gut and reduces absorption. This is why low calcium diets are not recommended in patients with idiopathic kidney stones. Calcium supplements are a different issue as they may contribute to hypercalciuria and not decrease oxalate ingestion, particularly if they are not taken at mealtimes
  • In the setting of malabsorption syndromes and GI disease. This occurs in patients following bariatric surgery, fat malabsorption and inflammatory bowel disease. The mechanism is thought to be related to binding of calcium to fatty acids thus reducing the availability of calcium for oxalate-binding, along with increased large bowel permeability. There have been multiple cases of patients developing severe oxalosis following jejuno-ileal bypass surgery.
The treatment of hyperoxaluria depends on the cause. For all patients, increasing fluid intake is good advice. Some patients with primary hyperoxaluria respond to treatment with pyridoxine which promotes conversion of glycoxylate to glycine instead of oxalate. Recently, a bacterium has been identified that metabolizes oxalate in the gut and this has been proposed as a potential treatment for hyperoxaluria. Interestingly, antibiotic treatment has been shown to decrease oxalobacter colonization in individuals with peptic ulcer disease.

Of course, all patients with hyperoxaluria should be advised to reduce oxalate consumption in the diet. Foods high in oxalate include spinach, rhubarb, tea, chocolate, star fruit and soy products. A full list can be found here.

Rhubarb is an interesting case. In the First World War because of the lack of access to fresh vegetables, the British government recommended that families supplement their diets with rhubarb leaves which were not traditionally eaten. It turns out that this was very bad advice. Rhubarb leaves contain considerably more oxalate than the stalks and there was a flurry of case reports towards the end of the war detailing cases of oxalate poisoning from rhubarb leaf consumption (see also and this). The toxicity of the leaves was probably increased by advice to cool the leaves with soda which increases the solubility of oxalate. Although the MD50 of oxalate would require the ingestion of about 5kg of rhubarb leaves, one could imagine that much lower doses would be toxic in patients with chronic kidney disease.

One last point about oxalate. It is a terminal metabolite and was thought to not have any positive role. However, recent data have suggested that oxalate is important for chloride transport in the proximal tubule where it acts similarly to formate..

Friday, August 16, 2013

Plasma Exchange for Severe ANCA-Associated Vasculitis (AAV)?

There has been lots of new data in the AAV literature of late. We have new nomenclature, including the dropping of Freidrich Wegeners name for the more generic but descriptive granulomatosis plus angiitis (GPA), by the Chapel Hill consensus conference. A large genome wide association study by the European Vasculitis Genetics Consortium has reported genetic variants associated with AAV and show that polymorphism segregate with ANCA specificity (Anti-MPO and Anti-PR3). A recent follow-up to the RAVE study demonstrates non-inferiority of rituximab as compared to oral cyclophosphamide for severe AAV. Moreover, among patients who had relapsing disease at baseline, rituximab was superior to conventional immunosuppression, at least for the first year.
Removing pathogenic antibodies via plasma exchange (PE) is an attractive, if crude, treatment option for severe AAV and is generally recommended for severe alveolar hemorrhage (although without much evidence). In patients without severe lung involvement, it has gained a role in attempting to prevent ESRD in patients with severe renal disease at presentation, due largely to the MEPEX trial. MEPEX was published in 2007 and included patients with AAV who required dialysis at presentation or had a serum creatinine >500 µmol/L (5.8 mg/dL). This study included 137 patients who were randomized to 7 PE treatments or IV methlyprednsiolone pulse therapy. Both groups received oral steroids and cyclophosphamide. PE was associated with a risk reduction of ESRD of 24% at 1 year. Patient survival and severe adverse event rates were similar in the 2 groups. A follow up to MEPEX has been published in Kidney International this month where the original patients were followed for a median of 3.95 years. During this follow-up, over a half of patient died and almost two-thirds had either died or developed ESRD (the composite primary outcome), with no significant difference between the groups. Also, there was no significant differences in relapse rate.
It must be noted that the original MEPEX trial was designed to examine rate of ESRD alone and demonstrated a benefit with PE at 1 year. The current study looks at a composite of ESRD & death at 4 years. If the early effect on ESRD if real, it would be intuitive that later mortality would be improved which it seems is not. Overall this study questions the benefit of PE in severe AAV and certainly dampens our enthusiasm for its use in this sick patient cohort. A criticism of MEPEX is that IV methlyprednisolone is considered a standard of care in initial treatment of severe AAV and not an alternative to PE. In the real world, patients would receive IV methylprednisolone plus PE. It is also very possible that a beneficial effect of PE exists in cases of AAV earlier in their natural history before significant scarring has occurred, as suggested by a meta-analysis. At this point, PE can certainly be considered as part of the armamentarium of AAV treatment but its exact indication is unclear. The ongoing PEXIVAS trial is planned to enroll 500 patients and will hopefully clarify the role of PE, if any, in severe AAV.