G20 finance ministers in Lima today endorsed international tax reforms launched by the Organization for Economic Cooperation and Development (OECD). The measures aim to tackle aggressive tax avoidance by multinational companies, known as Base Erosion and Profit Shifting (BEPS). While the measures are a tax milestone, they poorly represent the critical needs of developing countries, Oxfam warned today.
In Lima, Oxfam tax expert, Susana Ruiz, said: “The G20 claims it’s being tough on corporate tax dodging by endorsing these reforms, but the reality is that these measures have significant flaws, especially for developing countries.
“BEPS represents and serves the interests of rich countries and their vested interests. Yet the G20 has not signalled any plans for new more inclusive reforms - just the implementation of the BEPS package with all its faults.
“The G20 says all countries will now have an equal footing in international tax reform, but this hasn’t been the case for the BEPS negotiations where most developing countries have been shut out. This was despite developing countries being resolute in their call for equal participation in negotiating global tax reform.
“The OECD measures are a start – but they leave out too much to be effective – and should not be a moment of celebration. These reforms must mark the beginning – not the end – of international tax reform. The G20 should not just endorse BEPS but build on the progress so far and renew its commitment to effectively put an end to harmful corporate tax practices.
“This is why Oxfam wants a second generation of tax reform where all countries truly and formally have an equal say – rich and poor alike – so that robust measures will come about for the benefit of all. Global organizations should be in favor of this and all countries should share responsibility in taking this next step together.”