21
June 2001
OECD's tax project has no future unless small countries
invited to join Global Tax Forum
The
International Tax and Investment Organisation (ITIO)
today warned the OECD to involve small countries properly
in discussions or face the effective collapse of its
so-called "harmful tax competition initiative".
With
the OECD's Fiscal Affairs Committee due to spell out
the future of the OECD's tax initiative next week,
the ITIO is insisting that the OECD involve small
and developing economies (SDEs) fully in the process
of setting any new international standards.
Specifically,
the ITIO is urging opening up the OECD-sponsored Global
Tax Forum to all countries committed to the OECD's
three broad principles of transparency, non-discrimination
and exchange of information.
At
the moment, the Forum is open to all non-OECD countries
who accept these broad principles except for the SDEs
being examined by the OECD as potential tax havens.
These are also required to jump the extra hurdle of
entering into detailed and open-ended agreements with
the OECD before being allowed to participate in the
Forum.
ITIO
spokesperson Ben Coleman commented, "It is manifestly
unfair to exclude the countries most affected by the
OECD project. It is also thoroughly silly to exclude
countries who have more hands-on experience of offshore
issues than most OECD members.
"If
the OECD still aims to arrive at workable agreements,
they will first need to start involving small and
developing economies equally and fully in discussions,
on the basis of true partnership.
"Inviting
them to become members of the Global Tax Forum on
the same basis as all other countries would demonstrate
good faith and be a helpful first step. Without this
inclusive approach, it is difficult to see a way forward
for the OECD's tax project."
For
further information, please contact Ben Coleman in
London on Tel: +44 (0) 20 7526 3603, or Tel: +44 (0)
7958 616 444, or Email: media@itio.org
NOTES
TO EDITORS
1.
The OECD's Fiscal Affairs Committee is meeting on
25-26 June. It is expected to discuss the conclusions
of the OECD's Forum on Harmful Tax Competition on
11-13 June and set out the way forward for the OECD's
so-called "harmful tax competition initiative".
2. The OECD has consistently been criticised for the
top-down, dictatorial way in which it has run this
initiative. Stung by the criticism, at a meeting in
Malta on 19-21 September 200, OECD Ministers called
for greater regional and multilateral dialogue on
the implications of the OECD proposals, with a view
to developing multilateral approaches to take forward
the work on all aspects of global tax issues. They
requested the Commonwealth Secretariat to facilitate
this process.
3. This led to a Joint OECD-Commonwealth meeting in
Barbados on 8-9 January 2001. The meeting called for
the OECD to open up its recently created Global Forum
on Taxation ("Global Tax Forum") to non-member
countries.
4. As a result, OECD members decided to open up the
Forum to all jurisdictions that showed a genuine interest
in curbing harmful tax practices. In practice, such
interest was taken to mean a commitment to the broad
principles of transparency, non-discrimination and
exchange of information.
5. All the 35 small and developing economies (SDEs)
targeted by the OECD have agreed to these principles.
Yet they have been excluded from the Forum unless
they sign up to detailed agreements with the OECD,
which only six have done.
6. Meanwhile, the OECD has encouraged over 55 other
non-member countries, such as Argentina and South
Africa, to participate in the Global Tax Forum on
the basis that they accept the OECD's broad principles.
Unlike the SDEs - who have also accepted the broad
principles - these countries have not been required
to make detailed commitments to the OECD process as
a precondition for participation.
7. The ITIO sees no equitable reason for not including
all SDEs in the Global Tax Forum on the same basis
as other non-OECD countries.
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