16 September 2014
ActionAid UK's new report out today outlines why the UK's tax rules don't work for poor countries. Anders Dahlbeck tells us why we need to keep up the campaign pressure.
What’s missing from the BEPS?
- Poor countries are not part of the negotiations of new international tax rules. They are being consulted, but when push comes to shove, it’s rich countries at the negotiating table making the decisions.
- The BEPS project doesn’t deal with many of the issues that are important to developing countries. For example, it doesn’t deal with the issue of where profits made in developing countries are taxed.
- The solutions proposed are often expensive and unnecessarily difficult to implement. This makes it hard for resource poor developing countries to benefit from them.
This is all very disappointing as rich governments last year promised that international tax reforms would benefit poor countries as well.
We need to keep up the campaign pressure
Campaigners should not be discouraged though. The fact that the BEPS project is happening at all is in large parts down to campaigners showing their outrage at tax dodging in the past few years. Politicians responded to our demands to put this on the political agenda. Now we must hold them accountable for delivering.
This wave of tax reforms will also bring some positive things with it, mainly for prosperous and resource rich countries. These benefits include increased transparency around where companies book their profits and pay tax. This will make it easier for tax authorities to ensure that companies pay the tax that they are supposed to.
Developing countries need to be treated equally
Continued pressure will also help push international forums such as the G8 and G20 to commit to further reforms that will actually benefit poor countries who desperately need big business to pay their fair share of tax, so that those countries get the revenues needed to lift themselves out of poverty.
It is important that from here on in developing countries are treated as equal partners in international tax negotiations. The best way to ensure this, is to move tax reform negotiations away from restricted forums such as the Organisation for Economic Cooperation and Development (where they are currently taking place) into truly global forums, such as the UN.