Congratulations to James Farrar and Yaseen Aslam (and 17 others) who won their employment tribunal case against Uber last week.

The case concerned whether Uber drivers in the UK are self-employed independent contractors or ‘workers’ for Uber. The tribunal ruled that drivers work for Uber, not the other way round and therefore they are entitled to national minimum wage and paid annual holiday. It has been hailed as a ground-breaking case for testing the boundaries of the app-enabled gig economy.

But are the implications of the case less-than-meets-the-eye? And what kind of regulations needed to protect Uber drivers (and others in the gig economy), while enabling disruptive innovation for sustainable development?

Technology enabled platforms offer hope that that  they can help solve the world’s big problems creating better marketplaces and radically more efficient and accessible services. McKinsey reckon that by 2025 app based talent platforms could add $2.7 trillion to global GDP, while creating millions of new jobs. Uber is just one example, from New York to Kampala, it is seeking to shake up stagnant and inefficient transport systems and provide a better service both to drivers and riders.

But United Private Hire Drivers (UPHD) a trade body co-founded by Farrar and Aslam, and Networked Rights say that Uber’s business model is not so innovative, but actually works through old-fashioned exploitation; pushing risks onto the least powerful players in the supply chain and forcing (or tricking) them to operate below-cost.

Continue reading ‘Uber, London: smart apps demand smart regulation’


screen-shot-2016-10-21-at-13-17-02This article appeared in Tax Journal on 13 October 2016 and is reproduced with permission. (Available as a pdf)

The art of estimating the scale of tax avoidance involves tentative extrapolations, careful assumptions and caveats. The data available is patchy, calculations are educated guestimates, and studies must first deal with the problem that the term ‘avoidance’ itself means different things to different people. Continue reading ‘Making sense of the cost of tax avoidance’


Report Cover

I was excited to hear last year that ICAI (the UK’s Independent Commission for Aid Impact) was embarking on a Learning Review of DFID’s programme of work on international tax avoidance and evasion. It is a small programme (according to the report around £3 million a year, and three advisors who participate in international committees) which runs alongside DFID’s much larger in-country tax work. But if there is an area of development that would benefit from a careful analysis by an independent organisation this is it.

The problem is this isn’t it. The report released this week raises some important issues and makes high level recommendations about joined-up action which are fair enough, if a bit general: DFID should draw on learning from its in-country work, it should collaborate with other departments on tax capacity building, it should set explicit objectives and it should identify where UK tax policies impact on the priority concerns of developing countries.

However while calling for coherence, ICAI’s substantive criticisms of DFID’s approach are a mass of contradictions, and though everyone will find something interesting and something they agree with in this report, the analysis is superficial. It only goes as far as aggregating differing feedback from its soundings, rather than developing a single coherent analysis about donors’ roles on this issue and DFID’s performance. Continue reading ‘ICAI’s Learning Review of DFID’s approach to tax is disappointing’


A couple of weeks ago UNCTAD published a study on illicit financial flows through trade misinvoicing which they said “revealed staggering revenue losses to developing countries”. It made the extraordinary claim that “virtually all gold exported by South Africa leaves the country unreported” and suggested this was explained by  massive smuggling. The South African authorities took these claims seriously and responded robustly. [I wrote about the study here and have tracked the responses to it here].

Yesterday they published a further statement ‘UNCTAD welcomes discussion, transparency on commodities and misinvoicing’. It is disappointing, as it simply repeats the basic misunderstanding which led to the wild claims (‘mismatches in the trade data = ‘misinvoicing’), while adding new layers of confusion. It is also a bit odd, as it does not acknowledge the responses to their central claim on South African gold -by the South African Revenue Service, the South African Statistician General or the Chamber of Mines.

The statement is quite long, and so this blog post is too, but it is worth being clear on this stuff. The text in red is UNCTAD’s statement. Continue reading ‘Trade misinvoicing: UNCTAD is still confused’


[Updated on August 2nd and 3rd, and 16th  and December 27th and August 21 2017 – updates at the bottom]

This is a running update post following my post of July 20th 2016: Misinvoicing or Misunderstanding? . I will keep updating it.

The story so far

On July 16 2016 UNCTAD published a study on Trade Misinvoicing in Primary Commodities in Developing Countries with the headline “Some developing countries are losing 67% of commodity exports to misinvoicing”.

The study by Professor  Léonce Ndikumana, a leading expert on capital flight from Africa, looked at mismatches in the data from the UN COMTRADE database on exports of commodities such as cocoa, copper, gold, and oil from Chile, Cote d’Ivoire, Nigeria, South Africa, and Zambia. It was presented as revealing “staggering revenue losses to developing countries from commodity trade mispricing”, including  the explosive claim that between 2000 and 2014, $78.2 billion of gold – or 67% of overall gold exports were ‘misinvoiced’ (i.e. smuggled) out of  South Africa, and other claims such as that Zambian copper exported to Switzerland was going missing.

UNCTAD gave the study a lot of weight Dr.Mukhisa Kituyi Secretary General of UNCTAD said “This research provides new detail on the magnitude of this issue, made even worse by the fact that some developing countries depend on just a handful of commodities for their health and education budgets. Importing countries and companies, which want to protect their reputations, should get ahead of the transparency game and partner with us to further research these issues”. It was also highlighted by Deputy Secretary General Joakim Reiter in the closing statement to UNCTAD’s Global Commodities Forum.  Continue reading ‘The Great Gold Heist That Never Was’


This week a new study came out on Trade Misinvoicing in Primary Commodities in Developing Countries by Professor Léonce Ndikumana of the University of Massachusetts at Amherst, published by UNCTAD. It looks at the value of commodities such as copper, oil, gold, cocoa etc…exported from Chile, Cote d’Ivoire, Nigeria, South Africa and Zambia and compares this with the value of the same commodities imported into countries like the Netherlands, Switzerland, the UK and US.

Professor Ndikumana believes that mismatches in these records reveals systematic misinvoicing by mining, oil and commodity trading companies, and that it points to large-scale smuggling and tax evasion by major companies. As the FT reported “commodities from the developing world worth billions of dollars are being exported illicitly every year through misinvoicing”.

Continue reading ‘Misinvoicing or misunderstanding?’


Interviewees for jobs at Google are famously are asked fiendish questions like “how much does the Empire State Building weigh?” or “how many piano tuners are there in Chicago?”.[1]  The point of these ‘Fermi questions’ is not that there is a right answer, but that quick thinking applicants can combine the knowable (the population of Chicago), with the guessable (how prevalent is piano ownership? how often are they tuned?) and come up with plausible order-of-magnitude estimate.

The state of the art in estimating the cost of tax avoidance is somewhat similar. There are few known quantities, and the terms and concepts in the question are often vaguely specified. The impact of these numbers though, is more significant than a job interview brainteaser, as they shape the debate around how to strengthen and modernise international tax systems. All too often, even when carefully caveated, the numbers get picked up and used in ways that inflate their scale, and which allow rough guesstimates to be mistaken for empirical findings.

“€160-190 billion”…really?

In the run up to the final negotiation of the EU Anti-Tax Avoidance Directive last week the European Parliament put out a statement and infographic that Tax avoidance by companies cost EU countries €160-190 billion in lost revenue a year”.

Screen Shot 2016-06-22 at 13.18.21

The number is drawn from a research paper which was commissioned by the EU Parliamentary Research Services and written by Dr Robert Dover, Dr Benjamin Ferrett, Daniel Gravino, Professor Erik Jones and Silvia Merler. If you are interested in the issues the paper is worth reading in full. It also includes the data used in the calculations.

One thing you will notice (it is the first line of the abstract) is that the authors do not say that tax avoidance costs €160-190 billion at all. Their core estimate is €50-70 billion. They offer the €160-190 figure as an ‘overestimate’ based on a second, simpler methodology.

The explanation for these numbers on pages 13-16, although it is a little hard to understand. This blog post (which draws on discussions with the tax blogger Fairskat (Rasmus Corlin Christensen) and Iain Campbell of ARC, as well as with two of the authors Bob Dover and Erik Jones) is an attempt to clarify the basis for the two sets of estimates before the €160-190 figure passes into folklore.

Continue reading ‘Does corporate tax avoidance in Europe cost €160-190?’