Oxfam criticizes ‘toothless’ OECD Tax Package
Ottawa – The OECD’s Tax Package, released in Paris today, will not stop corporate tax dodgers cheating poor countries out of billions of dollars of tax revenues, says Oxfam. The Base Erosion and Profit Shifting (BEPS) Action Plan outlines 15 measures aimed at tackling aggressive tax avoidance by multinational companies.
Brittany Lambert, Oxfam Canada’s Senior Policy Advisor said: “The BEPS process does not do enough to prevent multinationals from cheating developing country governments out of vital tax revenue. Without taxes, governments cannot invest in health care, education and other great equalizers. Developing countries desperately need this money to tackle growing inequalities between the rich and the poor, and between men and women.”
Rich countries and corporate interests have dominated negotiations on the action plan while the majority of developing countries – representing two thirds of the world’s governments – played no formal role. As a result it fails to properly address the needs of poor countries and only goes a small way towards reforming a dysfunctional global tax system that facilitates corporate tax dodging.
For example the package does not legislate for multinational companies to have pay tax where they do real business or to stop the use of tax havens. It will also allow a number of harmful tax regimes, which contributed to the Lux leaks and other well-known scandals, to remain in place until 2021.
Lambert said: “The views of some of the world’s worst corporate tax dodgers are clearly reflected in the action plan. But the needs of poor countries like Sierra Leone – which has one of the world’s highest maternal mortality rates and where tax breaks to just six multinationals add up to eight times the national health budget – are not.”
Oxfam demands the G20 support a new reform process that includes all countries on an equal footing and that urgently tackles the problems that have been ignored or insufficiently addressed by the BEPS process.
Lambert said: “This tax package must mark the start not the end of global tax reform. Canada and other wealthy countries should support a second generation of reforms that genuinely creates an international tax system which works in the interests of the majority – not the few”.
Notes for editors
- A ‘fast facts’ document on corporate tax avoidance and the BEPS process is available
- G20 Finance Ministers are expected to endorse the OECD action plan and launch a consultation on how to go about implementing them when they meet in Peru on 8 October.
- The action plan will be submitted to G20 Heads of State for adoption at the November summit in Turkey.