23
October 2001
ITIO challenges OECD: "Do as you would be done
by"; also links tax and trade policies
Members
of the International Tax and Investment Organisation
(ITIO), a grouping of small and developing economies,
have reviewed current taxation, trade and e-commerce
challenges and the need to strengthen financial anti-terrorism
mechanisms following the terrorist attack on the United
States. Outcomes of the fourth meeting of the ITIO,
which took place on 12-14 October 2001 in the Cayman
Islands, are as follows.
Taxation
Members
examined the current position of the anti-tax competition
initiative of the Organisation for Economic and Development
(OECD).
The
meeting restated the importance of applying international
exchange of information and transparency standards
on a level playing field. To be effective, uniform
standards must be universally adopted, without discrimination.
OECD member states and other developed economies should
explicitly confirm their intention of abiding by the
standards demanded of small and developing economies
(SDEs).
Trade
The
meeting discussed the relationship between trade,
inward investment and taxation. Members were concerned
that the sanctions threatened by the OECD tax initiative
could constitute non-tariff barriers to trade in services,
which would be incompatible with multilateral trade
obligations.
The
meeting reaffirmed that all incentives, whether tax-related
or otherwise, should be considered as a whole. Members
would encourage other international organisations
to address the linkage between trade and taxation
policies.
E-commerce
ITIO
members expressed concern about the potentially adverse
implications of discriminatory EU and OECD proposals
for taxing exporters of e-commerce services from developing
countries.
Terrorism
Speaking
after the meeting, Lynette Eastmond, Director of the
ITIO Secretariat, said:
"As
free and democratic countries, members of the ITIO
express their abhorrence at the brutal terrorist attack
on the USA. We are determined to cooperate fully with
the United States and the coalition against terrorism.
"There
is no automatic connection between countries with
low or zero tax rates and terrorism. We will continue
to work with other free and democratic governments
to cut off terrorists' access to funds."
NOTES TO EDITORS
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. Members were delighted to welcome Panama as an
observer to the 12-14 October meeting.
4. Issues which the ITIO is addressing include:
• The OECD's initiative against tax competition;
• Clarification of the linkage between trade
and taxation policies;
• Discriminatory EU and OECD proposals for taxing
developing-country exporters of e-commerce services;
• Strengthening financial anti-terrorism mechanisms;
and
• The OECD threat to all geographically mobile
service industries (including banking, insurance,
reinsurance, fund management, leasing, factoring shipping,
distribution centres and the new growth sector of
e-commerce, software and electronic data processing).
5. For further information, please contact Ben Coleman
on (office) + 322 645 9881 or (mobile) +44 (0) 7958
616 444, email bcoleman@apcouk.com
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