Tax is now at the heart of the development agenda

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There are two main coordination bodies for the development agencies of Europe, Concord and Eurodad. On Wednesday they were asked to make a presentation to a meeting of EU development ministers in Bordeaux. This is the main thrust of what they asked for:

In the Monterrey Consensus it was agreed that: governments should encourage "the orderly development of capital markets through sound banking systems and other institutional arrangements [including] transparent regulatory frameworks and effective supervisory mechanisms" and take steps to ensure that developing countries can retain their domestic resources. This has clearly not happened.

a) We welcome the idea of having a new Bretton-Woods conference. This conference will need to address seismic flaws in the global financial system and as such must be allowed sufficient time and high level commitment to tackle serious systemic reform. Intergovernmental decision-making on the current financial crisis must take place within the UN system, maximising the opportunity of the UN Financing for Development summit. Among other issues to be addressed must be the introduction of a fair, transparent and independent sovereign debt workout mechanism.

b) The EU plays a major part in maintaining the secrecy jurisdictions (tax havens) through which developing countries lose an estimated € 350 billion a year in illicit capital flight. EU governments must systematically reform and regulate these jurisdictions, many of which are European. The Savings Tax Directive must be tightened up to force automatic exchange of information between all legal entities. The directive should progressively be extended to become a global regulation.

c) As part of an aggressive drive against tax evasion the EU also has a responsibility to introduce other transparency measures, such as an accountancy standard for transnational companies to break down their accounts country by country.

d) We also strongly call on the EU to give real teeth to intergovernmental work on reform of taxation, by supporting the upgrade of the UN committee of tax experts to the status of an intergovernmental body, and providing sufficient resources to undertake its task.

It's enormously encouraging to see the Tax Justice Network agenda at the heart of European NGOs demands of development ministers. It really is now true to say that the old three legged development stool of aid, trade and debt has been replaced by a four legged chair in which those three have been joined by tax reform. That reform is about the relief of poverty. I genuinely believe that because it it it will now be delivered.