21 September 2014 - Christian Aid’s principal advisor on economic justice Toby Quantrill said today: 'The G20 finance ministers agreement to automatically exchange tax information on a reciprocal basis by the end of 2018 is welcome, but given that 46 jurisdictions have already agreed to meet this standard earlier than 2018, there is little new in this announcement.'
“We were hoping for real progress on ensuring developing countries that are not part of the G20 being able to access this information. We are still some way from a clear process that will make it easy and quick for developing countries to benefit.
“The Finance Ministers communique today talks explicitly of ensuring that developing country concerns are addressed in the global effort to tackle tax dodging. While the proposals and commitments include some significant steps forward, there is a very long way still to go before this goal is met.
“The overall pattern of progress is indicative of the power dynamics operating within the OECD/G20. Some areas of work are moving well, but there seems to be slower progress where the interests of powerful nations may be threatened. Certain reforms that could prevent poorer countries losing out seem to have been blocked.”
Mr Quantrill said plans put forward by the OECD last week to tackle the issue of multinationals dodging tax by shifting profits into low or no tax jurisdictions are indicative of the problem. The OECD was tasked by the G20 last year to find ways to address the problems with the global tax system which it has acknowledged is no longer fit for purpose. G20 leaders stated very clearly that ‘profits should be taxed where economic activities deriving the profits are performed and where value is created’.
“The OECD has said that that developing countries could be losing up to three times the global aid budget through tax evasion and avoidance,” said Mr Quantrill. “Three days ago it published its first set of recommendations and reports from its ‘Base Erosion and Profit Shifting (BEPS)’ project.
'The G20 has made clear that the process needs to meet the needs of developing countries. While progress in the OECD's BEPS reports on developing a template for ‘Country by Country Reporting’ by multinationals is welcome, the failure to ensure that such reporting may be made available publicly makes it impossible to take seriously the claim from the OECD that “a major step forward in transparency” has been achieved.
'As a number of recent reports from the IMF and from the OECD itself have made clear, many of the problems of greatest concern to developing countries are simply not being addressed at all.
'It is crucial that these concerns are dealt with through a process that is fully inclusive of developing countries and which is managed by an institution that is fully representative of all countries.
'The process to date shows that the OECD, a club of rich countries, is not in a position to play this role. Today’s communique from G20 finance ministers suggests that they too are falling short.'
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Notes to editors:
1. Christian Aid works in some of the world's poorest communities in around 50 countries at any one time. We act where there is great need, regardless of religion, helping people to live a full life, free from poverty. We provide urgent, practical and effective assistance in tackling the root causes of poverty as well as its effects.
2. Christian Aid’s core belief is that the world can and must be changed so that poverty is ended: this is what we stand for. Everything we do is about ending poverty and injustice: swiftly, effectively, sustainably. Our strategy document Partnership for Change explains how we set about this task.
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