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G7 must include developing countries in international tax reform
G7 Finance Ministers meeting in Dresden today discussed the reform needed and progress made regarding international taxation and the role of multinational companies.
In response, Oxfam International policy advisor Claire Godfrey said:
“It is positive the G7 wants to spur on international tax reform to stop multinationals avoiding taxes, and wants to support tax administrations and fair taxation in developing countries. But this G7 finance meeting has again been a debate among exclusive club members without the equal participation of developing countries. It’s no wonder that tax issues relevant to poor countries, such as a public country-by-country reporting of multinational companies, fairer deals on tax treaties, and harmful tax competition, were not addressed. But G7 leaders should not be satisfied with just closing tax loopholes at home while letting multinational companies sidestep their tax obligations in Africa.
“Due to tax avoidance by multinational companies, developing countries lose out more than US$100billion annually (1). Reforming corporate tax rules so that poor countries can claim the money owed to them is critical to overcoming poverty and tackling inequality, and for having sustainable economic growth.
“Developing countries must not only be at the negotiations table when it comes to tax but on an equal footing as well. The perfect opportunity for this is at the upcoming Financing for Development Conference in Ethiopia in July. Oxfam calls on G7 Heads of States and Finance Ministers to support reform of dysfunctional global tax rules so they’re fair for all countries once and for all, in Addis.”
The AU/UNECA High Level Panel on Illicit Financial Flows (IFF) estimated that Africa loses up to USD50Bn a year to IFF. This is enough to halve poverty in Africa by 2030 according to estimates by UNECA, which state that USD48Bn per year is needed between 2015 and 2030 to halve poverty in Africa, assuming that inequality remains constant and savings, FDI and ODA stay at their 2014 levels (AU/UNECA Africa Elements Paper, § 3.2).
In July, Africa will host the Third UN Financing for Development Conference (FFD3) in Addis Ababa, Ethiopia.
Dannielle Taaffe, in the UK, 0044 (0) 7917 110 066, email@example.com