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New OECD tax proposals ignore the poor

19 February 2014 | by Luke Harman

Two people shaking hands in a darkened room ‘Rich countries have a duty to help developing countries collect the taxes owed to them.’

These were the words of the G8 last year. So, why are rich nations now in danger of acting like an elitist members club, ignoring the poor, who can’t afford the entrance fee?

Reforms for the rich

Last week, the Organisation for Economic Cooperation and Development (OECD) – made up of 34 of the world’s richest countries - unveiled new proposals to help catch tax dodgers. But these reforms run the risk of working only for the rich.

The reforms will help countries share information on money held overseas, often in tax havens.

But, the rules will only apply to nations that can share information back. Many developing countries simply don’t have the capacity for this and may be left out.

Furthermore, tax havens can choose who they’ll share information with. Who has the clout and resources to make them share information? You guessed it - the very same club of rich nations.

Poor people playing catch up

The OECD has devised reforms that work for them, leaving developing countries to catch up later. But poor countries need this information just as much (if not, more so) – with up to $9 trillion thought to be hidden offshore from tax authorities in developing countries*  - money that could be spent on lifting people out of poverty. 

These proposals could be a big step towards tax justice. But if it is justice only for the rich, then this is not justice at all.

Tax havens should be made to share information with all countries, not just those with power. Creating a multilateral agreement is the best way to achieve this.

We must make a stand

There is still time to make these proposals work.

We are calling on the OECD and G20 to recognise the challenges poor countries face and make provisions to ensure they can receive information as soon as possible, enabling them to collect taxes that are rightfully theirs and lift people out of poverty.

Spread the message of tax justice in your church with our tax resources.

*Source:  Tax Justice Network website 

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 About the author

Luke Harman

Luke Harman is Christian Aid's campaigns officer.