OECD » Tax Research UK

The Vatican needs to get its act together

OECD, Secrecy jurisdictions 1 Response »

Sep 292010

The Vatican has yet to formally commit to financial transparency, the Organization for Economic Cooperation and Development said one week after Italian magistrates opened a probe into its bank for alleged violations of money-laundering laws.

While the Holy See said last week that it’s in talks with the OECD about getting on the Paris-based group’s so-called White List of nations that comply with global norms, it has not taken the first step toward transparency, said Jeffrey Owens, head of the OECD’s Center for Tax Policy and Administration.

This is a failure to even reach the first rung of regulation.

And that’s just not good enough.

Come on guys‚Ä¶.walk the talk. Or live the prayer, if you like.

The OECD makes a big step forward

86, Country-by-country, Development, OECD, Tax Havens, Tax management Comments Off

Sep 222010

This article is on the Guardian site this morning. It’s written by Mario Pezzini is the director of the OECD development centre in Paris. He says:

This year, many African countries celebrated 50 years of independence. And yet, too many African governments fund development policies primarily by using foreign aid and not by mobilizing their own resources. For some countries, there are not yet alternatives. But for many others, it is possible and urgent to develop a fairer and more efficient taxation system. Unlike aid money, which will likely remain painfully limited, tax revenue can make an enormous difference to achieving development goals. In 2008, the combined fiscal revenue in Africa reached over $400bn – 10 times the total amount of aid money flowing to the continent.

The international community could play a key role. Saying that African countries should rely more on themselves is not the same as saying they should be left to achieve this alone. Development partners could support an international tax dialogue to voice and address Africa’s concerns on issues such as tax evasion, fiscal havens and abuses by multinationals.

Meanwhile, the more efficient a country’s use of collected taxes, the less tax revenue it will need to collect to provide decent infrastructure and functioning public services. Reforms are needed to improve the public sector’s investment capacity and to involve the private sector in partnerships. Monitoring and evaluation of public expenditure should become the norm, and coherence between national and local actions has to be improved.

Long-term, sustainable development will always be contingent on local ownership and domestic resources. These in turn require informed public policies with long-term perspectives. This is the key to African countries’ ability to diversify their economies and take a more central role in the global economy. Aid helps, but it is not enough.

The Tax Justice Network could have written that.

Without the Tax Justice Network that would not have been written.

Now it’s time to get the OECD tax directorate to agree. They have not bought the idea of country-by-country reporting which is one step to addressing this issue as yet. And their secrecy jurisdiction initiative is bogged down in their inappropriate belief Tax Information Exchange Agreements when there are much better forms of information exchange available.

Buit having the development people firmly on side is a big help. And it shows we’re wining the argument.

Time the OECD realised this is the 21st century

OECD, TIEA Comments Off

Jul 012010

I note Bloomberg covered the conference of the British Swiss Camber of Commerce conference (which must have been a humdinger of a do). Somehow it’s only just come to my attention, but of particular note was this report:

The OECD has no agenda to push for an automatic exchange of information, Pascal Saint-Amans, head of international cooperation and tax competition at the Paris-based OECD said. In the surrounding European Union, where some nations apply an automatic information exchange, the interest paid to a resident of another member state is routinely sent to that country’s tax authorities. “Automatic exchange of information is not on the agenda,” Saint-Amans said. “It’s not even on the hidden agenda. The standard is the exchange of information on request.”

I should add I know Pascal. he’s a nice guy. But he and the OECD are just so far removed from the realities of the 21st century it’s breathtaking to think they are given opportunity to influence let alone create this debate.

The world is in financial crisis. The world needs every penny of tax revenue it can get to solve that crisis. The tax fraudsters are running amok still – the international tax gap running to hundreds of billions of dollars a year, and yet the OECD still peddles an arcane system of information exchange invented in the ear of the steam ship.

The technical capacity to exchange tax information automatically exists. I’ve explained how the problems of defining income can be overcome. I’ve explained that the data to exchange has to exist in law.

So what is missing? Just the political will needed at the OECD to actually tackle tax fraud. That’s it. That’s what’s missing. You’d really believe that they go out of their way to help fraudsters on the basis of the comments they make – because that’s what their ludicrous system of information exchange – which cannot and never will work effectively – does.

C’mon Pascal – wake up, smell the coffee and realise you’re right here, bang in the middle of the 21st century and start talking about creating systems to meet current need. OK?

Reuters analysis-OECD crackdown on tax havens seen lacking teeth

OECD, Secrecy jurisdictions, Tax Havens, Tax Justice Network 2 Responses »

Apr 192010

ANALYSIS-OECD crackdown on tax havens seen lacking teeth 13:48 Hours ago.

A good summary by Reuters of the current differences between the OECD and the Tax Justice Network – “a respected and independent advocacy group”.

Tax haven drive will mean greater scrutiny for multinational corporations

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Mar 202010

FT.com / Global Economy – Tax haven drive will mean greater scrutiny.

The FT notes:

The international drive to prise open tax havens could expose businesses to greater scrutiny as a result of a little-noticed feature of hundreds of new deals aimed at tracking down tax evaders.

Jeffrey Owens, director of the centre for tax policy and administration at the Paris-based Organisation for Economic Co-operation and Development, said the ability to request details about companies was “an important aspect” of the agreements on tax information exchange that have proliferated in recent months.

He said: “I think the world is in the process of changing. It will have a big impact on corporations and high net worth individuals.”

That’s true.

But as the FT notes:

Over the past year, campaign groups have succeeded in persuading the OECD to consider new guidelines on transparency after claiming that transfer pricing abuses allow companies to divert revenues from developing countries to tax havens.

This may have an even bigger impact!

Tax offences = money laundering

OECD, Switzerland, Tax evasion Comments Off

Mar 012010

Tax offences = money laundering.

As headlines go the above, from the Straits Times in Singapore is pretty good. And spot on.

As it reports:

THE OECD is planning to list tax offences as a form of money laundering, a move that could hit Switzerland hard, Swiss newspaper SonntagsZeitung reported on Sunday.

Without citing its sources, the newspaper said that if tax offences were reclassified in money laundering, lawyers, tax advisors, accountants and bankers who are implicated in such offences could get up to three years in jail.

About time too. It’s another step the Tax Justice Network have been calling for.

References for the day

OECD Comments Off

Jan 282010

The OECD statement on tax and development I referred to this morning is here.

Stephen Timms’ speech is here.

For those who want to check what I reported.

Building accountable taxation

OECD, Tax Justice Network, TIEAs Comments Off

Jan 282010

Attiya Waris of Tax Justice Network is addressing the OECD meeting. She says there are seven key words in tax:

Transparency
Accountability
Responsibility
True
Fair
Efficient
Effective

She says changes tax is changing. In Kenya indirect tax does not create tax awareness, and it can’t work because it is dependent on literacy. This breaks down the link between state and society.

Direct taxes have to create this. This is done by allocating tax to community level so local choice can be made on how to use revenues. This also means accountability rises and transparency and responsibility with it. This is bottom up change.

Now she says it is time for the OECD to deliver a top down delivery of data. But this will not happen or be useful if the IMF and World Bank undermine direct taxation systems by promoting VAT.

She says the MNC claiming it pays tax is OK – but they can’t substitute for local tax relationships to build accountability. They shouldn’t be claiming they’re good people for paying tax – it is their obligation.

And finally she argues for multilateral information exchange to allow bilateral deals to work. Until developing countries have enough data to make bilateral requests the Tax Information Exchange Agreements programme will be stalled in its effectiveness. This is at the core of information exchange issues, as I’ve argued for some time.

Why tax evasion?

Development, OECD 6 Responses »

Jan 282010

Joel Tan-Torres, Commissioner of the Bureau of Internal Revenue in the Philippines has offered reasons why it is so hard for developing countries to collect tax. He says:

Too few staff
Staff too lowly paid so high turnover
Poor IT
Slow speed of enforcing action through the legal system.
Problem of special interest tax provisions
The aggressiveness of the tax industry in promoting avoidance bordering on evasion. Tax evasion is at least 0.03% of GDP in the Philippines – which seems surprisingly low to me, but then so is the tax yield.

In many ways this sounds like the UK but let’s have no doubt. In terms of scale everything is worse.

What he needs he says is information. Internally generated sources are not enough in the current world. He appears to be asking for automatic information exchange, but without being specific. What he does say is that expertise will need to be developed to make this work.

Volume issues regarding information will need technology support – but it’s clear, it’s our job to do this. This has to be a key component in the development agenda.