ECOSOC: the world needs an intergovernmental commission on tax cooperation

TJN advocates for international cooperation to protect nations from abusive tax practices, including evasion and the race to the bottom in corporate taxation. This can only be achieved through a legitimate global organisation with recognised political status. No such organisation currently exists. The OECD is the pretender to this position, but lacks legitimacy and too many of its prominent members are tax havens/secrecy jurisdictions. We therefore advocate for the United Nations to strengthen its role in this area by creating an Intergovernmental Commission on International Cooperation on Tax Matters (the political body) supported by an advisory Committee of Experts along the lines of the existing Committee (though far, far better resourced).

This option is one of several which will be discussed in a just few weeks at the annual session of the UN's Economic and Social Council. TJN is one of the many signatories to the following letter to governments across the world urging them to take the necessary action towards creating an Intergovernmental Commission.

28th June 2011

We, the undersigned, are writing to request that, at the upcoming deliberations of the Economic and Social Council 2011, your government endorses the proposal for creating an Intergovernmental Commission on International Cooperation in Tax Matters, while retaining the UN Committee of Experts on International Cooperation in Tax Matters as a subsidiary body.

In December of 2008, the Doha Review Conference on Financing for Development called for the Economic and Social Council to examine ways to strengthen institutional arrangements for international cooperation in tax matters. In the report requested by resolution 2010/33 of the Economic and Social Council, the Secretary General elaborated on a number of options to achieve that goal. We are writing to express our strong support to option 3 stated in such report, namely, the creation of an intergovernmental commission on international cooperation in tax matters, while retaining the UN Committee of Experts on International Cooperation in Tax Matters as a subsidiary body.

Developing countries have a large stake on issues of mobilization of domestic resources as these are a cornerstone of efforts for financing development. For this reason, while there is a general need to strengthen and broaden the participation of developing countries in global economic governance, nowhere is such need more justified than in the area of intergovernmental cooperation on tax matters. Such intergovernmental decisions influence the key principles that determine and constrain developing countries’ ability to succeed in taking their fair share of revenue in an environment where the tax base is increasingly global and capacity to tax increasingly interdependent. Without an effective representation of their interests, rhetorical commitments to enhance and strengthen mobilization of domestic resources risk being deprived of any meaning.

The seriousness of these considerations is further underscored by the current role of mobilization of domestic resources in the overall development finance landscape. The financial crisis of 2008-09 and continued financial turmoil in its wake have resulted in development finance flows being negatively affected. Climate change has wiped out some of the gains booked by the concerted effort to achieve some development goals and raised the need for additional resources to fund mitigation and adaptation.

All these factors underline the imperative for sustainable sources of finance- through ODA but ever more importantly through setting conditions that enable countries to raise their own financial resources including through taxation. Against this backdrop, the lack of a forum that could provide the required weight to the interests of developing countries on international cooperation in tax matters is all the more striking. Whilst the OECD has considerable expertise, and is able, on occasion, to consult non-members or invite them to meetings – its primary focus and expertise relates to established, industrialised economies. As recently put by an OECD representative speaking at the UN, the OECD does this only in order to seek a broader range of views on decisions that, ultimately, are a matter for its own membership to make.

The challenges and needs of poor economies with respect to taxation are very different and cooperation between developed and poor economies on taxation issues should take place in a more inclusive and representative forum. The widespread use of the UN Tax Committee’s model tax convention in negotiations, the interest in its practical manual on transfer pricing, and the strong support from developing countries for an intergovernmental Commission on International Cooperation in Tax Matters underlines the effectiveness and representativeness of the UN in the global effort towards greater tax cooperation .

It is therefore essential that funds be found to support these and to finance greater developing country participation in meetings, either from reallocating existing UN funds or from a reprioritisation of resources currently made available to other international bodies, such as the OECD task force and the IMF trust fund.

Thank you in advance for your kind consideration of this request.

Sincerely yours, Signatories: -

Alex COBHAM, Chief Policy Adviser, Christian Aid, UK
Bernd NILLES, Secretary General,
CIDSE - Núria MOLINA, Director, EURODAD
Lars KOCH, Head of Policy, IBIS, Denmark
John CHRISTENSEN, Director, Tax Justice Network International Secretariat

- Rudy DE MEYER, 11.11.11 - Coordination of Flemish North South Movement,Belgium - Anna THOMAS, Head of Economic and Social Development, ActionAid UK - Martin TSOUNKEU, General Representative, Africa Development Interchange Network (ADIN), Cameroon - Elvire EUGENE, Executive Director, Association Femmes Soleil d'Haiti (AFASDA), Haiti - Mark HERKENRATH, Alliance Sud – the Swiss Coalition of Development Organisations, Switzerland - John LANGMORE, Chair, Anglican National Public Affairs Commission and Professor, School of Social and Political Sciences, University of Melbourne, Australia - Prem SIKKA, Director, Association for Accountancy & Business Affairs, UK - Andreas MISSBACH, Private Finance Programme, Joint Managing Director, Berne Declaration, Switzerland - Andrea BARANES, Finance Campaigner, Campagna per la riforma della Banca mondiale (CRBM), Italy - Helen OJARIO, Alternate Representative, Carmelite NGO, USA - Germaine PRICE, Main Representative, Company of the Daughters of Charity of St. Vincent de Paul, USA - Laust Leth GREGERSEN, Head of Secretariat, CONCORD Denmark, Denmark - Griselda MARTINEZ-MORALES, New York Main representative, Congregations of St. Joseph, USA - P.A. SURENDRAN, General Secretary, Consumers Association, Palakkad, Kerala, India - Margaret MAYCE, NGO Representative, Dominican Leadership Conference, USA - Markus BRUN, Head of Policy, Fastenopfer, Switzerland - Mama KOITE, President, FEMNET (African Women’s Development and communication Network), Mali - Emira WOODS, Co-Director, Foreign Policy in Focus, Washington DC, USA - Mathilde DUPRÉ, Coordinator, French coalition “Plateforme Paradis Fiscaux et Judiciaires", France - Raymond W. BAKER, Director, Global Financial Integrity, USA - James A. PAUL, Executive Director, Global Policy Forum, USA - Fatima RODRIGO, PBVM, International Presentation Association of the Sisters of the Presentation, USA - François GOBBE, Kairos Europe WB, Belgium - Janice G FOERDE, chairperson, K.U.L.U.-Women and Development, Denmark - Steven O'NEIL, SM, Marianists International, USA - Marie DENNIS, Director and Kathy MCNEELY, Maryknoll Office for Global Concerns, USA - Celine PARAMUNDA, UN Representative, Medical Mission Sisters, USA - Missionary Oblates of Mary Immaculate, USA - Martha GALLAHUE, Main Representative, National Ethical Service, USA - Jo Marie GRIESGRABER, Executive Director, New Rules for Global Finance, USA - Elin ENGE, Executive Director, Norwegian Forum for Environment and Development, Norway - Kevin DANCE, Main Representative/ CEO, Passionists International and Chair of NGO Committee on Financing for Development, USA - Thomas BRENNAN, SDB, Salesian Missions, USA - Faith COLLIGAN, DC, Sisters of Charity Federation, USA - Eva HANFSTAENGL, Coordinator, Social Justice in Global Development e.V., international, based in Germany - Katrin MCGAURAN, Researcher, SOMO (Centre for Research on Multinational Corporations), The Netherlands - Dedi HARYADI, Chairman, Taxation Advocacy Group (TAG), Indonesia - Nicole TICHON, Executive Director, Tax Justice Network USA, USA - Hans-Rudolf SCHELLER, Member Tax Justice Network, Switzerland - Richard MURPHY, Director, Tax Research LLP, UK - Raffaele SALINARI, President, Terre des Hommes International Federation, Austria - Bhumika MUCHHALA, Researcher, Third World Network, Malaysia - Susan GEORGE, Board President, Transnational Institute and on behalf of the Fellows and Associates of TNI, The Netherlands - Hernán CORTÉS, Policy and Communications’ Officer, UBUNTU Forum, Spain - Catherine FERGUSON, Coordinator, UNANIMA International, USA - Daniel LEBLANC O.M.I., VIVAT International, USA - Josep XERCAVINS, WDGpa – World Democratic Governance project association, Spain