Taxation is one of the cornerstones of democracy. It is the very lifeblood of the social contract as it allows the state to pool the citizens’ resources in order to fulfill its obligations to its constituency. It allows the construction of the physical, social and legal infrastructures that enable practically everything else in the state. Every year, all around the world, enormous sums are secreted away through aggressive tax-planning. In July 2012, the Tax Justice Network published a research according to which at least 21 trillion dollars of unreported private financial wealth was owned by wealthy individuals via tax havens at the end of 2010. A World Bank report published in 2012 claimed that Israel has some of the highest levels of unreported income in the developing countries: 23% of its GDP. A tax system that does not succeed in collecting the taxes due, may drive the state into an economic crisis that would, in turn, increase social and economic disparities. Thus, when citizens – and particularly corporate citizens – avoid paying their taxes, they restrict the government’s ability to provide services and, in the final analysis, hurt themselves. The tax justice section in the Corporate Social Responsibility Institute, alongside Tax Justice Network Israel (TJN IL) are both part of the Academic Center of Law and Business. Together they address the issue through published reports, position papers, and proposals for legislative reform. The main areas that the tax justice section has been working on have been: the extent of tax evasion, the connection between CSR and taxes, the Encouragement Law for Capital Investment and the issue as well as Country by Country Reporting. |
