An OECD-led plan on how to tackle global tax dodging has ignored the problems faced by many of the poorest countries in the world, ActionAid said today.
The plan – known as the Base Erosion and Profit Shifting (BEPS) process – has failed to consider a series of key issues vital to stopping tax avoidance in developing countries, according to a new ActionAid report.
The Organisation for Economic Co-operation and Development (OECD) claims three times as much money is lost by poor countries to tax havens as they receive in aid every year.
But the new proposals will do little to help prevent this, according to our new report.
The proposals are due to be debated at the G20 Finance Ministers meeting in Cairns, Australia at the end of this week.
ActionAid Tax Policy Adviser Anders Dahlbeck said: “The OECD’s proposals on how to tackle tax avoidance are wholly inadequate. They go nowhere near far enough in helping the world’s poorest countries make sure big businesses pay their fair share of tax.”
The ActionAid report — The BEPS Process: Failing to deliver for developing countries - found that:
- Poor countries were not invited as equal negotiating partners in the BEPS process – they were merely asked to participate in consultations.
- A number of key areas of tax avoidance affecting poor countries – including the question on where companies should pay tax on money earned in developing countries – were not considered.
- Key recommendations on changes to tax legislation made in the report are either too expensive or too technical for some of the poorest countries in the world to implement.
Mr Dahlbeck said:
“The OECD itself recently published a report in which it admitted that the benefits to poor countries would be limited.
“The reality is that what was promoted at the G20 last year as a giant stride in tackling global tax dodging for poor countries has turned out to be a baby step. The proposals are instead mainly of use to richer nations.
“It is now time for other agencies – including the United Nations – to take the lead on reforming the international tax system to make sure it works for developing countries.”