A recent Guardian piece ("Ten reasons why European governments should back a global tax body") (June 25, 2015) calls upon European governments to push the upcoming Financing for Development conference in Addis Ababa, Ethiopia to call for a new UN tax body. But is a new tax body at the UN really needed? Before even discussing whether a UN tax body would be an effective mechanism, its best to get the facts straight on the work of the OECD's Base Erosion and Profit-shifting program, which has been laboring away for close to two years to better harmonize taxation regimes around the world. The Guardian piece, written by Tove Maria Ryding of the Eurodad, seems to ignore the BEPs Project's efforts at being inclusive.
As one of its justifications for a UN tax body, the Guardian piece says that "global tax standards are decided behind closed doors at the Organization for Economic Co-operation and Development (OECD) - also known as the "rich countries' club". But this caricature obscures the extensive developing country consultation that has occurred throughout the BEPs Project.
Beyond the 34 OECD member countries, 14 countries from a cross-section of regions and per capita income-levels directly participate in the Committee on Fiscal Affairs and the Working Party on meetings on the BEPs Project: Albania, Azerbaijan, Bangladesh, Croatia, Georgia, Jamaica, Kenya, Morocco, Nigeria, Peru, Philippines, Senegal, Tunisia, and Vietnam. In addition, two regional tax organizations - the African Tax Administration Forum (ATAF) and the Inter-American Centre for Tax Administration (CIAT) are also directly involved in the BEPs Project. Through this direct involvement in the project, countries are able to provide input at the working and the decision-making levels to ensure their specific concerns are taken into account.
Moreover, a large number of developing countries have also been consulted extensively through a combination of regional and global high-level policy dialogues. Over 80 developing countries and other non-OECD/non-G20 economies have been consulted in the first year of the Project through four in-depth regional consultations and five thematic global fora, attended by more than 110 jurisdictions and a number of representatives from civil society and the business community. The OECD coordinating work on a Multilateral Instrument to Modify Bilateral Tax Treaties has also been very broad.
What the Guardian piece also fails to note is that these supposed "closed-door" consultations also make make public all comments received on the various BEPs Action Items. The current UN tax committee does not seem to have the same robust stakeholder engagement mechanisms and it is unclear how an upgraded body would function in this regard.
We need to work with the facts before creating new global mechanisms of any kind. The June 25, 2015 draft of the Outcome Document for the Financing for Development Conference appears to be on the right track on this point: it "welcomes" the work of the BEPs Project and at the same time calls for enhanced support of the existing UN Committee of Experts on International Tax Matters, including by doubling its meeting schedule and improving its engagement with members of the Economic and Social Council (ECOSOC). Enhanced coordination between the UN tax committee and the BEPs Project would also be welcome, but we should not be too hasty to discount how inclusive the BEPs Project truly is.