Thursday, July 09, 2009

G8 communiqué: what it says on tax

The text of the final G8 communiqué in Italy has this on tax:

"We welcome progress in negotiations of agreements on the exchange of information for tax purposes. We urge further progress in the implementation of the OECD standards and the involvement of the widest possible number of jurisdictions, including developing countries. It is also essential to develop an effective peer review mechanism to assess compliance with the same standards. This could be delivered by an expanded Global Forum."

This is good and bad. The good part is seeing "developing countries" creeping into the international discourse on dealing with transparency. This is major progress (in the rhetoric, at any rate). The bad part - apart from the fact that there is much left out - and the G8 has clung to the appallingly inadequate OECD standards, without referring to any of the much, much better alternatives that are now emerging.

Guess what - the G8 is a rich countries' club with a strong tax haven lobby inside - and the OECD is a rich countries' club with a strong tax haven lobby inside. Hardly surprising that they come out with such feeble proposals.

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