07
March 2002
Cook Islands commitment to OECD tax project depends
on equivalance
The Cook Islands has made a conditional commitment
to the harmful tax competition project of the Organisation
for Economic Cooperation and Development (OECD). Their
media statement, which was first issued on 26 February
2002, is attached. Details of the proposed commitment
are still under discussion between the Cook Islands
and the OECD.
As
set out in the statement, the commitment relies on
certain conditions being met, among these, "Equivalent
commitments are to be made by all OECD member states",
and "Implementation by all OECD Member States
and all other relevant jurisdictions of equivalent
commitments within the same time frame."
Commenting,
ITIO spokesperson Ben Coleman said, "It will
be interesting to see whether the OECD accepts these
reasonable conditions or whether it still demands
that small states have to make changes more quickly
than the OECD's own offshore centres of Switzerland
and Luxembourg, which will have the effect of advancing
OECD members' own interests at the expense of small
countries."
"It
is manifestly unfair to force small states to do anything
before Switzerland and Luxembourg. All countries should
move together, taking the same steps at the same time."
EXPLANATORY
NOTES
1. The International Tax and Investment Organisation
(ITIO) is a grouping of small and developing economies
(SDEs) set up in March 2001 to help SDEs respond to
global tax and investment challenges. It explicitly
considers the development implications of these challenges.
2. The ITIO currently comprises Anguilla, Antigua
and Barbuda, Bahamas, Barbados, Belize, British Virgin
Islands, Cayman Islands, Cook Islands, Malaysia, St
Kitts & Nevis, St Lucia, Turks & Caicos and
Vanuatu. The Commonwealth Secretariat, Pacific Islands
Forum Secretariat and CARICOM Secretariat have observer
status.
3. The four OECD member countries who have refused
to sign up to the OECD's project (Switzerland, Luxembourg,
Belgium and Portugal) include the principal onshore
competitors for the offshore world, and account for
many of the tax neutral structures run onshore within
the OECD. Offshore centres are concerned that if they
are not obliged to adhere to the same standards as
offshore centres, business will just migrate to these
OECD members, which raises further doubts about the
fairness of the process.
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