Football clubs as well as poor countries suffer from financial secrecy, says new report.
14.05.2010By Stine Alvad
The report ‘Blowing the Whistle: Time’s Up for Financial Secrecy’, published by international developing agency Christian Aid, highlights the potential harm on both football clubs and developing countries that can be caused by the secrecy offered in tax havens.
“In football, tax-haven secrecy can jeopardise the very existence of much-loved clubs, hiding the true state of owners’ finances from supporters and creditors alike until the money runs out. In the developing world, tax dodging by individuals and unscrupulous companies trading across borders costs lives,” the press release for the report explains.
Financial secrecy and trade-related tax dodging cost developing countries up to $160 bio each year, estimates Christian Aid who has joined forces with Football Supporters’ Federation and Supporters Direct in the making of the report.
In an open letter, included in the report, the two organisations, representing football fans’ interest, express their concern for financial secrecy’s potential harm on football clubs and call for urgent reforms on the area.
‘It is not good enough to say that no laws are being broken by the anonymity of club owners or the use of opaque ownership structures. What is being broken is something far more fundamental for football: the bond of trust between communities and the people, who own the clubs,’ Dave Boyle, Chief Executive of Supporters Direct said, according to the press release.
Reforms called for by the Football Supporters’ Federation and Supporters Direct are:
- Every football club to reveal publicly the individuals who ultimately control it, regardless of domicile.
- A percentage of every club’s shares to be held by a not-for-profit supporters’ trust, entitling it to representation on the club’s board.
- A ‘tax’ on opaque ownership by ensuring that for each additional entity that a club has in its chain of control, a reduction is made in the amount it gets from its respective league
Reforms called for by Christian Aid are:
- Country-by-country reporting, that would require companies trading across borders to disclose the profits they make and the taxes they pay in every country where they operate. That way tax abuses could be quickly spotted.
- Multilateral, automatic exchange of tax information between governments, to help revenue authorities track down those seeking to dodge the taxes they owe by moving their money offshore.
- Jurisdictions worldwide to establish public records of ownership of each company, corporation, trust, partnership, limited liability partnership, charity and any other entity created under law.
Read the full report (external link): Blowing the Whistle: Time’s Up for Financial Secrecy