New IMF seeks offshore crackdown
ActionAid has pointed us towards a new IMF Staff Position Note entitled Long-Term Trends in Public Finances in the G-7 Economies which contains the following:
"An equitable adjustment will require a more energetic fight against tax evasion and erosion, both nationally and internationally. The recent initiatives undertaken to fight tax havens are an important development in this respect. But more coordination is needed among tax administrations of various countries and among tax policies, in a globalized economy."
Nice to see the IMF coming up with some interest in tackling tax havens - at last. This has prompted an email from an experienced tax expert:
"I think especially interesting is the phrase they use, "tax evasion and erosion". The more usual phrase is "tax evasion and avoidance", which includes the many tricks of TNCs. It sounds to me as if during the bureaucratic process of writing this report, someone insisted on replacement of "avoidance" by "erosion". This is symptomatic, if the anti-haven drive is limited to evasion only it will only catch inept individuals, and let the skilfull and corporate tax avoiders go free."
This Kremlinology in the phrasing of tax discussions may seem arcane, but it matters. And it is interesting to note the IMF saying this - something that has been proposed for a long time, but has been off the political radar for quite some time.
"Maybe it is time to revive the idea of a World Tax Organization to address these coordination issues."
Now that would be dramatic.
Update: Demetrius' comment under this blog is worth a mention:
Actually, I like to see the word "erosion" along with evasion and avoidance as it allows another category of description. Certainly the other two deal with some aspects, but "erosion" does indicate what is happening to tax bases and to tax capability in many countries.
Yes, this is something we haven't yet thought about yet, but it does seem like a potentially useful word. Let us think some more about it. . . . comments welcome.
"An equitable adjustment will require a more energetic fight against tax evasion and erosion, both nationally and internationally. The recent initiatives undertaken to fight tax havens are an important development in this respect. But more coordination is needed among tax administrations of various countries and among tax policies, in a globalized economy."
Nice to see the IMF coming up with some interest in tackling tax havens - at last. This has prompted an email from an experienced tax expert:
"I think especially interesting is the phrase they use, "tax evasion and erosion". The more usual phrase is "tax evasion and avoidance", which includes the many tricks of TNCs. It sounds to me as if during the bureaucratic process of writing this report, someone insisted on replacement of "avoidance" by "erosion". This is symptomatic, if the anti-haven drive is limited to evasion only it will only catch inept individuals, and let the skilfull and corporate tax avoiders go free."
This Kremlinology in the phrasing of tax discussions may seem arcane, but it matters. And it is interesting to note the IMF saying this - something that has been proposed for a long time, but has been off the political radar for quite some time.
"Maybe it is time to revive the idea of a World Tax Organization to address these coordination issues."
Now that would be dramatic.
Update: Demetrius' comment under this blog is worth a mention:
Actually, I like to see the word "erosion" along with evasion and avoidance as it allows another category of description. Certainly the other two deal with some aspects, but "erosion" does indicate what is happening to tax bases and to tax capability in many countries.
Yes, this is something we haven't yet thought about yet, but it does seem like a potentially useful word. Let us think some more about it. . . . comments welcome.
posted by TJN at 8:59 am
1 Comments:
Actually, I like to see the word "erosion" along with evasion and avoidance as it allows another category of description. Certainly the other two deal with some aspects, but "erosion" does indicate what is happening to tax bases and to tax capability in many countries.
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