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Towards a Level Playing Field,
second edition.

Report undertaken by Stikeman Elliott on behalf of the ITIO and STEP.


21 June 2001

OECD's tax project has no future unless small countries invited to join Global Tax Forum

The International Tax and Investment Organisation (ITIO) today warned the OECD to involve small countries properly in discussions or face the effective collapse of its so-called "harmful tax competition initiative".

With the OECD's Fiscal Affairs Committee due to spell out the future of the OECD's tax initiative next week, the ITIO is insisting that the OECD involve small and developing economies (SDEs) fully in the process of setting any new international standards.

Specifically, the ITIO is urging opening up the OECD-sponsored Global Tax Forum to all countries committed to the OECD's three broad principles of transparency, non-discrimination and exchange of information.

At the moment, the Forum is open to all non-OECD countries who accept these broad principles except for the SDEs being examined by the OECD as potential tax havens. These are also required to jump the extra hurdle of entering into detailed and open-ended agreements with the OECD before being allowed to participate in the Forum.

ITIO spokesperson Ben Coleman commented, "It is manifestly unfair to exclude the countries most affected by the OECD project. It is also thoroughly silly to exclude countries who have more hands-on experience of offshore issues than most OECD members.

"If the OECD still aims to arrive at workable agreements, they will first need to start involving small and developing economies equally and fully in discussions, on the basis of true partnership.

"Inviting them to become members of the Global Tax Forum on the same basis as all other countries would demonstrate good faith and be a helpful first step. Without this inclusive approach, it is difficult to see a way forward for the OECD's tax project."

For further information, please contact Ben Coleman in London on Tel: +44 (0) 20 7526 3603, or Tel: +44 (0) 7958 616 444, or Email:


1. The OECD's Fiscal Affairs Committee is meeting on 25-26 June. It is expected to discuss the conclusions of the OECD's Forum on Harmful Tax Competition on 11-13 June and set out the way forward for the OECD's so-called "harmful tax competition initiative".

2. The OECD has consistently been criticised for the top-down, dictatorial way in which it has run this initiative. Stung by the criticism, at a meeting in Malta on 19-21 September 200, OECD Ministers called for greater regional and multilateral dialogue on the implications of the OECD proposals, with a view to developing multilateral approaches to take forward the work on all aspects of global tax issues. They requested the Commonwealth Secretariat to facilitate this process.

3. This led to a Joint OECD-Commonwealth meeting in Barbados on 8-9 January 2001. The meeting called for the OECD to open up its recently created Global Forum on Taxation ("Global Tax Forum") to non-member countries.

4. As a result, OECD members decided to open up the Forum to all jurisdictions that showed a genuine interest in curbing harmful tax practices. In practice, such interest was taken to mean a commitment to the broad principles of transparency, non-discrimination and exchange of information.

5. All the 35 small and developing economies (SDEs) targeted by the OECD have agreed to these principles. Yet they have been excluded from the Forum unless they sign up to detailed agreements with the OECD, which only six have done.

6. Meanwhile, the OECD has encouraged over 55 other non-member countries, such as Argentina and South Africa, to participate in the Global Tax Forum on the basis that they accept the OECD's broad principles. Unlike the SDEs - who have also accepted the broad principles - these countries have not been required to make detailed commitments to the OECD process as a precondition for participation.

7. The ITIO sees no equitable reason for not including all SDEs in the Global Tax Forum on the same basis as other non-OECD countries.

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The ITIO has thanked Commonwealth Secretary-General McKinnon for his stance following the publication of an OECD report, 'Tax Co-operation: Towards  a Level Playing Field'...

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