OECD tax package criticized for cheating poor
The OECD’s tax package, released in Paris on Tuesday, will not stop corporate tax dodgers cheating poor countries out of billions of dollars of tax revenue, says Oxfam.
The OECD’s Base Erosion and Profit Shifting (BEPS) Action Plan has outlined 15 measures, reported Oxfam, which are aimed at tackling aggressive tax avoidance by multinational companies.
“Rich governments are all bark and no bite when it comes to corporate tax dodging,” said Oxfam’s global policy head of inequality, Claire Godfrey.
“This package of measures will not prevent another Lux Leaks type scandal and will not stop multinational companies cheating poor countries out of billions of dollars in taxes – money which is desperately needed to tackle poverty and inequality.”
Oxfam notes that rich countries and corporate interests have dominated negotiations on the action plan while the majority of developing countries, which represent two thirds of the world’s governments, played no formal role.
As a result, the aid agency said, it fails to properly address the needs of poor countries and only goes a small way toward reforming a dysfunctional global tax system that facilitates corporate tax dodging.
One example of the packages faults, Oxfam says, is that it does not legislate for multinational companies to have pay tax where they do real business, or to stop the use of tax havens.
The package will also allow a number of harmful tax regimes, which contributed to the Lux Leaks – a 2014 scandal that revealed the extent of tax avoidance happening in Luxemburg and elsewhere – and other well-known scandals, to remain in place until 2021.
“This BEPS process was a false start. The views of some of the world’s worst corporate tax dodgers are clearly reflected in the action plan. The needs of poor countries, however, were not, because most were effectively shut out of the process,” Godfrey said.
Oxfam demands that the G20 support a new reform process that includes all countries on an equal footing and that urgently tackles the problems that have been ignored or insufficiently addressed by the BEPS process.
“This tax package must mark the start not the end of global tax reform. We need a second generation of reforms that genuinely creates an international tax system that works in the interests of the majority – not the few,” Godfrey said. (ebf)(++++)
