The most equitable way to create a fairer global tax system
NEW YORK, 18 April 2016– Following the Panama Papers release, the Global Alliance for Tax Justice renews its call for a United Nations inclusive intergovernmental tax body to be established. Global cooperation is urgently needed to create a fairer global tax system to increase domestic resource mobilization and reduce inequality.
The Panama Papers are the largest revelations to date exposing the dark secrets of how the rich and multinational corporations avoid paying their share of taxes by hiding fortunes in offshore tax havens. People around the world are voicing their outrage over how such nefarious practices are rapidly worsening economic inequality. The documentary evidence has made it clear that the Panama Papers are not about Panama alone, but about a network of secrecy jurisdictions. These disclosures underscore the urgency of a global solution to this increasingly damaging global problem.
Establishing a universal, well resourced, UN intergovernmental tax body is in everyone’s interest. Such a body has been advocated as a priority measure by the G77 and China and supported by Global Alliance for Tax Justice members and allies throughout the UN Financing for Development process.
In order for governments to be able to fund Sustainable Development Goals and deliver on their human rights obligations to provide public healthcare, education, water and sanitation, affordable housing and transportation – all countries must have an equal seat at the table to determine equitable international tax practices. Currently, decision-making on global tax rules takes place at the OECD and G20, where more than 100 developing countries are excluded from the opaque processes. This is an important reason why the global tax system has become so fragmented, dysfunctional and unfit to meet the needs of the world’s poorest.
The Global Alliance for Tax Justice calls on governments to:
- Establish an inclusive intergovernmental body on tax matters under the auspices of the UN, which could also initiate and lead negotiations on a new UN framework convention on international cooperation in tax matters as a first step in the reform of international tax rules.
- Adopt a common UN standard of multilateral, automatic exchange of tax information with the option of non-reciprocal information exchange for countries with low capacity for a period of time that will allow them build up their systems to comply with the standard.
- Eliminate secrecy of beneficial ownership worldwide through public registers of beneficial owners.
- Ensure financial transparency by implementing annual public country-by-country reporting by multinational corporations.
Further recommendations from the Global Alliance can be found in the previously released FfD Position Paper. The vision put forward by the Global Alliance for Tax Justice promotes progressive redistributive taxation polices to fund the vital public services that will end inequality and poverty and lead to sustainable development. Together we must transform the current economic system that privileges corporations and the wealthy, drives inequality and hurts our environment.