UN tax committee warms up for its new mandate
"I've got to take my problem to the United Nations" sang Eddie Cochran in Summertime Blues. Civil society groups this week heeded that advice, attending a meeting in Amsterdam to discuss the agenda of a United Nations committee which is dedicated to improving international cooperation on tax. The mood and outcome of the meeting were very positive.
The meeting was hosted by the International Bureau of Fiscal and Tax Documentation and largely funded by the Norwegian government. It was attended by some 20 officials from all the world's regions. Some of them are new to this committee, but all of them experienced in tax policy and implementation matters.
The idea of the meeting was to orient the committee members on current issues and debates and to ensure that members understand the slightly arcane workings of the committee itself. This will ensure that they can hit the ground running at their official meeting from 19-23 October in Geneva.
Participants discussed many aspects of current tax debates, aiming to think through how they can be most effective in fulfilling their mandate and contributing to produce an updated model UN tax treaty and other outputs. Possible new items on their agenda include developing a practical manual and checklist for developing countries on corporate transfer pricing and further work on corporate tax competition and on taxing services.
We civil society groups were invited to attend and speak at one session (following another where international business representatives made their case). My colleagues (from SOMO, Oxfam-NOVIB, ActionAid, Both ENDS, Christian Aid and Tax Justice Network Netherlands) and I informed the officials about the rapid increase in the number of organisations taking up tax and related financial regulation questions and encouraged them to move boldly and fast.
The main points we raised were automatic information exchange, country by country reporting by transnationals, tax competition and environmental taxation. Another issue tabled was the roles of International Financial Institutions such as the European Investment Bank (which has just this week issued a new policy on offshore financial centres). The officials - a much livelier bunch than several similar groupings I've had the pleasure to address - responded with interest.
One very much welcomed the broad approach being taken, saying that just focussing on tax havens was "so 1980s". He indicated that many developing countries felt huge pressure from transfer pricing, for example by oil and gas companies, and that some countries are considering adopting transfer pricing legislation. At the same time he cautioned against encouraging developing country governments to run before they can walk, reiterating that several do a bad job at collecting simple direct taxes: how then that they be expected to administer more complex ones?
Several officials asked for more information about how we NGOs are organising ourselves on this issue, how we are linking North and South, and whether we can help get more groups working on tax justice in countries where there are as yet none.
I returned down the train line to Brussels optimistic that, though it may take them another summer or two, this UN body will establish itself as a rival standard setter to the OECD. As regular TJN readers know this body is allowing secrecy jurisdictions to be whitelisted just as soon as they sign half-hearted information exchange agreements with another dirty dozen countries such as themselves.
Alex Wilks, director, European Network on Debt and Development
The meeting was hosted by the International Bureau of Fiscal and Tax Documentation and largely funded by the Norwegian government. It was attended by some 20 officials from all the world's regions. Some of them are new to this committee, but all of them experienced in tax policy and implementation matters.
The idea of the meeting was to orient the committee members on current issues and debates and to ensure that members understand the slightly arcane workings of the committee itself. This will ensure that they can hit the ground running at their official meeting from 19-23 October in Geneva.
Participants discussed many aspects of current tax debates, aiming to think through how they can be most effective in fulfilling their mandate and contributing to produce an updated model UN tax treaty and other outputs. Possible new items on their agenda include developing a practical manual and checklist for developing countries on corporate transfer pricing and further work on corporate tax competition and on taxing services.
We civil society groups were invited to attend and speak at one session (following another where international business representatives made their case). My colleagues (from SOMO, Oxfam-NOVIB, ActionAid, Both ENDS, Christian Aid and Tax Justice Network Netherlands) and I informed the officials about the rapid increase in the number of organisations taking up tax and related financial regulation questions and encouraged them to move boldly and fast.
The main points we raised were automatic information exchange, country by country reporting by transnationals, tax competition and environmental taxation. Another issue tabled was the roles of International Financial Institutions such as the European Investment Bank (which has just this week issued a new policy on offshore financial centres). The officials - a much livelier bunch than several similar groupings I've had the pleasure to address - responded with interest.
One very much welcomed the broad approach being taken, saying that just focussing on tax havens was "so 1980s". He indicated that many developing countries felt huge pressure from transfer pricing, for example by oil and gas companies, and that some countries are considering adopting transfer pricing legislation. At the same time he cautioned against encouraging developing country governments to run before they can walk, reiterating that several do a bad job at collecting simple direct taxes: how then that they be expected to administer more complex ones?
Several officials asked for more information about how we NGOs are organising ourselves on this issue, how we are linking North and South, and whether we can help get more groups working on tax justice in countries where there are as yet none.
I returned down the train line to Brussels optimistic that, though it may take them another summer or two, this UN body will establish itself as a rival standard setter to the OECD. As regular TJN readers know this body is allowing secrecy jurisdictions to be whitelisted just as soon as they sign half-hearted information exchange agreements with another dirty dozen countries such as themselves.
Alex Wilks, director, European Network on Debt and Development
posted by TJN at 6:30 am
3 Comments:
The UN could do well to look at the way the tax systems in the developed countries of northern Europe are impacting on the social fabric.
Due to what used to be called the tax wedge, the high tax Scandinavian countries have a growing problem of persistent unemployment amongst young people and particularly children of immigrants.
If this is not addressed, it will be both goodbye to the Scandinavian welfare model and hello to basket-case economies. This is a socio-economic time bomb.
@Henry
I find your comment on Scandinavia
hugely exaggerated, at the very least. If I recall it correctly, Denmark was recently ranked as one of the most competitive countries worldwide on some ranking. Denmark is also referred to as a model to reduce unemployment, because of strict policies to get unemployed people (back)to work accompanying the social benefits. As for Norway and Sweden, the people there enjoy very generous vacation days and maternity/parental leave, so that's not a real tax wedge, it's more a social benefit that goes directly to workers. And yes, that makes labour relatively more expensive, but I think it also explains why people in those countries are among the happiest among earth. This should be taken into account.
Sweden is no model to follow. It just looks good from a distance. The country has been through many vicissitudes since the days of high Socialism in the early 1960s, which I suspect is where much of the image comes from. The Swedish welfare system is no longer what it seems. There have been severe cut-backs. There is, I repeat, persistent long term unemployment especially amongst immigrants and their children, and this has erupted in what amounts to an intifada which has been going on in Malmö for the past couple of years. The problem has now spread to the suburbs of Göteborg, as was reported in Göteborgs-Posten yet again this week.
High labour costs have led for years to the exporting of jobs. At the moment, most days there are reports of more sackings.
And there is widespread dissatisfaction with the school and health services. OK, Scandinavia is a much better place to be than the UK but the social and economic breakdown is still noticeable, though perhaps a decade or so behind Britain. This is neither a model to be emulated nor does it leave room for complacency. The main grounds for hope is that the Swedes seem better than the Brits at self-critical analysis and they are on the whole good at getting their act together. And there is a lot of space here so people can keep out of each other's way and enjoy picking mushrooms or blueberries in the woods. Ample space land inexpensive apart from in the centres of conurbations. But these benefits which are probably the main reason why people feel happier (I wouldn't stay here if I didn't) are despite rather than because of high taxes.
Denmark I know little about so cannot comment. Norway is an oil economy so comparisons cannot be made.
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