OECD tax project less successful than thought, says
International Tax and Investment Organisation, a grouping
of small and developing economies (SDEs), is concerned
that the impression is being given that the Organisation
of Economic Cooperation and Development (OECD) has
more support for its "harmful tax practices project"
than is the case.
its statement accompanying the publication of the
report on Wednesday 14 November, the OECD says, "There
are now a total of 11 committed jurisdictions".
In a statement on the same day, Gabs Makhlouf, the
Chairman of the OECD's Committee on Fiscal Affairs,
said, "Eleven jurisdictions have committed to
eliminate their harmful tax practices".
commentators have taken this to mean that nearly a
third of the jurisdictions named as tax havens - ie
eleven out of 35 - have made a commitment. This is
far from being the case. The actual position is that,
in the past eighteen months, only five of the 35 (or
one in seven) jurisdictions on the OECD's tax haven
list have signed up.
confusion arises because six potential tax havens
made a commitment to the OECD's controversial tax
project before the OECD issued its original list in
2000 and thus did not figure among the 35 listed.
spokesperson Ben Coleman commented: "The OECD's
tax project is proving less successful than it had
hoped. We welcome OECD members' publicly stated desire
for 'change through dialogue and consensus'. The tax
project will get much further if small and developing
economies are involved fully in the development of
1. The International Tax and Investment Organisation
(ITIO) is a grouping of small and developing economies
(SDEs) set up in March 2001 to help SDEs respond to
global tax and investment challenges. It explicitly
considers the development implications of these challenges.
2. The ITIO currently comprises Anguilla, Antigua
and Barbuda, Bahamas, Barbados, Belize, British Virgin
Islands, Cayman Islands, Cook Islands, Malaysia, St
Kitts & Nevis, St Lucia, Turks & Caicos and
Vanuatu. The Commonwealth Secretariat, Pacific Islands
Forum Secretariat and CARICOM Secretariat have observer
3. The statement issued by the OECD to accompany its
2001 Progress Report is on the internet at http://www.oecd.org/oecd/pages/home/displaygeneral
4. OECD Fiscal Affairs Committee Chairman Gabs Makhlouf's
statement is on the internet at http://www.oecd.org/pdf/M00021000/M00021178.pdf
5. The OECD's own progress report in 2000 ("Towards
Global Tax Cooperation") makes clear that "A
small number of the jurisdictions reviewed by the
Forum have, in advance of this reporting, made a public
political commitment at the highest level (an 'advance
commitment') to eliminate their harmful tax practices
and to comply with the principles of the 1998 Report.
In recognition of this commitment, this Report does
not include the names of jurisdictions that have made
this advance commitment ('advance commitment jurisdictions')
even if they presently meet the tax haven criteria.
[para.17]" (this report is on the internet at
6. The 2001 Progress Report published on Wednesday
states that members of the OECD Fiscal Affairs Committee
"strongly prefer an approach that promotes change
through dialogue and consensus" (para. 49; the
report is on the internet at http://www.oecd.org/pdf/M00021000/M00021182.pdf).
7. British Treasury Minister Dawn Primarolo has wrongly
claimed that a dozen jurisdictions support the OECD's
project, stating, "The [UK] Government welcomes
the commitments and action that 12 tax havens have
now made to end harmful tax practices" (see UK
Inland Revenue press release of 14 November, on the
internet at http://220.127.116.11/coi/coipress.nsf/
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