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Jakarta Post

G20 economies must focus on illicit outflows: Activists

Anton Hermansyah (The Jakarta Post)
Jakarta
Mon, September 5, 2016

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G20 economies must focus on illicit outflows: Activists A hostess prepares for the G20 Finance Ministers and Central Bank Governors Meeting in Chengdu, the capital of southwestern China's Sichuan province, on July 22. (AP/Ng Han Guan, Pool, File)
G20 Indonesia 2022

In achieving sustainable development goals (SDGs), G20 countries are still facing serious issues in financial transparency, where big corporations based in developing countries avoid taxation, activists warn.

The Indonesia Civil Society Forum on Foreign Policy (ICFP), which includes 13 non-government organizations (NGOs) such as Institute Global Justice (IGJ), International NGO Forum on Indonesian Development (INFID) and Migrant Care, has criticized the unfair and non-transparent taxation system among the G20 members.

Infid program manager Siti Khoirun Ni'mah pointed out the fact that tax policies were made based on the companies’ registration and not on their operation base. This created a big hole for tax evasion practices and huge illicit financial outflows, leaving the developing countries at the mercy of the multinational corporations’ interests.

"According to a Global Financial Integrity study, eight of the 19 members of G20 are included in the 'big 15 countries with illicit financial flows during 2003-2014.' The poor countries, including developing countries such as Indonesia, recorded $1.1 trillion in losses due to this," she said in Jakarta on Monday.

The data showed that China was in the first position with US$1.39 trillion in outflows, followed by Russia ($1.05 trillion), Mexico ($528.4 billion) and India ($510.24 billion). Indonesia is in the tenth position with $180.71 billion in outflows.

While the G20 forum had agreed on the Automatic Exchange of Information, not all of its members seriously implemented the agreement, including Panama, recently notorious due to the Panama Papers scandal. ICFP urged the Indonesian government to push for sanctions for the countries that neglect the agreement. (ags)

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