SOMO's new report on tax and development
In a month’s time, the follow up International Conference on Financing for Development will be held in Doha. As one of the major forums where international tax issues are on the agenda, it is an important opportunity to consider tax problems for developing countries. This topic has not yet got as much attention as other key development financing topics such as trade, aid and debt. A good moment too, to bring it to the attention of a wider audience.
Developing countries lose an estimated $500 billion every year, just in illegal private outflows. This is and enormous amount when you compare it to foreign public aid inflows of $50 to $100 billion annually in recent years.
SOMO has published a new background paper on tax and financing for development. This paper (also click here) summarises tax problems in financing for development, and gives an overview of recent developments in international taxation. Focusing on corporate taxes, the paper explains common tax avoidance strategies in a detailed but non-technical manner, enabling civil society staff and policy makers to get familiar with tax issues and the importance of a fair international tax system that is supportive to development.
Since a lack of effective regulation and cooperation is a main cause of international tax problems, the paper includes recommendations regarding the policies of the OECD, UN, IMF, World Bank, EU, IASB and TG-7. Among the recommendations, we would like to highlight the development of a country-by-country financial reporting standard for all multinational corporations, since this would substantially increase transparency for investors.
TJN's comment: recommended.