Civil society claims for an intergovernmental commission on tax cooperation

Sources: Tax Justice Network , Eurodad.

Some 50 civil society organisations from all over the world claimed this week for the creation of an Intergovernmental Commission on International Cooperation on Tax Matters to protect nations from abusive practices, including evasion and the race to the bottom in corporate taxation. The claim is headed by the international networks of development groups Eurodad, CIDSE, ActionAid, Christian Aid and the Tax Justice Network (TJN), and the Danish group Ibis.

The organisations signed an open letter to all governments asking them to create this commission in the upcoming sessions of the UN's Economic and Social Council (Ecosoc), without removing the existing Committee of Experts that must be “better resourced”, informed TJN.

According to the call, the OECD wants to carry out the function of monitoring tax practices, but “lacks legitimacy and too many of its prominent members are tax havens or secrecy jurisdictions”, explained TJN in a communiqué. 

Next is the open letter sent on June 28 to the governments, also signed by focal points of Social Watch as the National Centre for Development Cooperation (Belgium), Alliance Sud (Switzerland) and the Third World Network (Malaysia). 

Join the call for stronger UN role on tax matters!

We, the undersigned, are writing to request that, at the upcoming deliberations of the Economic and Social Council 2011, your government endorses the proposal for creating an Intergovernmental Commission on International Cooperation in Tax Matters, while retaining the UN Committee of Experts on International Cooperation in Tax Matters as a subsidiary body. 

In December of 2008, the Doha Review Conference on Financing for Development called for the Economic and Social Council to examine ways to strengthen institutional arrangements for international cooperation in tax matters. In the report requested by resolution 2010/33 of the Economic and Social Council, the Secretary General elaborated on a number of options to achieve that goal. We are writing to express our strong support to option 3 stated in such report, namely, the creation of an intergovernmental commission on international cooperation in tax matters, while retaining the UN Committee of Experts on International Cooperation in Tax Matters as a subsidiary body. 

Developing countries have a large stake on issues of mobilization of domestic resources as these are a cornerstone of efforts for financing development. For this reason, while there is a general need to strengthen and broaden the participation of developing countries in global economic governance, nowhere is such need more justified than in the area of intergovernmental cooperation on tax matters. Such intergovernmental decisions influence the key principles that determine and constrain developing countries’ ability to succeed in taking their fair share of revenue in an environment where the tax base is increasingly global and capacity to tax increasingly interdependent. Without an effective representation of their interests, rhetorical commitments to enhance and strengthen mobilization of domestic resources risk being deprived of any meaning. 

The seriousness of these considerations is further underscored by the current role of mobilization of domestic resources in the overall development finance landscape. The financial crisis of 2008-09 and continued financial turmoil in its wake have resulted in development finance flows being negatively affected. Climate change has wiped out some of the gains booked by the concerted effort to achieve some development goals and raised the need for additional resources to fund mitigation and adaptation.

All these factors underline the imperative for sustainable sources of finance- through ODA but ever more importantly through setting conditions that enable countries to raise their own financial resources including through taxation. Against this backdrop, the lack of a forum that could provide the required weight to the interests of developing countries on international cooperation in tax matters is all the more striking. Whilst the OECD has considerable expertise, and is able, on occasion, to consult non-members or invite them to meetings – its primary focus and expertise relates to established, industrialised economies. As recently put by an OECD representative speaking at the UN, the OECD does this only in order to seek a broader range of views on decisions that, ultimately, are a matter for its own membership to make. 

The challenges and needs of poor economies with respect to taxation are very different and cooperation between developed and poor economies on taxation issues should take place in a more inclusive and representative forum. The widespread use of the UN Tax Committee’s model tax convention in negotiations, the interest in its practical manual on transfer pricing, and the strong support from developing countries for an intergovernmental Commission on International Cooperation in Tax Matters underlines the effectiveness and representativeness of the UN in the global effort towards greater tax cooperation .

It is therefore essential that funds be found to support these and to finance greater developing country participation in meetings, either from reallocating existing UN funds or from a reprioritisation of resources currently made available to other international bodies, such as the OECD task force and the IMF trust fund. 

Thank you in advance for your kind consideration of this request. 

Sincerely yours, Signatories:

Alex COBHAM, Christian Aid, UK 

Bernd NILLES, CIDSE

Núria MOLINA, EURODAD 

Lars KOCH, IBIS-Denmark 

John CHRISTENSEN, Tax Justice Network International Secretariat 

Rudy DE MEYER, 11.11.11-Belgium 

Anna THOMAS, ActionAid UK 

Martin TSOUNKEU, Africa Development Interchange Network, Cameroon

Elvire EUGENE, Association Femmes Soleil d'Haiti 

Mark HERKENRATH, Alliance Sud-Switzerland 

John LANGMORE, Anglican National Public Affairs Commission-Australia 

Prem SIKKA, Association for Accountancy & Business Affairs-UK 

Andreas MISSBACH, Berne Declaration-Switzerland

Andrea BARANES, Campagna per la riforma della Banca mondiale-Italy 

Helen OJARIO, Carmelite NGO-USA 

Germaine PRICE, Company of the Daughters of Charity of St. Vincent de Paul-USA

Laust Leth GREGERSEN, CONCORD Denmark

Griselda MARTINEZ-MORALES, Congregations of St. Joseph-USA 

P.A. SURENDRAN, Consumers Association, Palakkad, India 

Margaret MAYCE, Dominican Leadership Conference-USA  

Markus BRUN, Fastenopfer-Switzerland

Mama KOITE, African Women’s Development and Communication Network-Mali 

Emira WOODS, Foreign Policy in Focus-USA 

Mathilde DUPRÉ, Plateforme Paradis Fiscaux et Judiciaires-France 

Raymond W. BAKER, Global Financial Integrity 

James A. PAUL, Global Policy Forum-USA 

Fatima RODRIGO, International Association of the Sisters of the Presentation-USA

François GOBBE, Kairos Europe WB, Belgium 

Janice G FOERDE, KULU-Women and Development-Denmark 

Steven O'NEIL, Marianists International-USA 

Marie DENNIS and Kathy MCNEELY, Maryknoll Office for Global Concerns-USA 

Celine PARAMUNDA, Medical Mission Sisters-USA 

Missionary Oblates of Mary Immaculate-USA 

Martha GALLAHUE, National Ethical Service-USA 

Jo Marie GRIESGRABER, New Rules for Global Finance-USA

Elin ENGE, Norwegian Forum for Environment and Development

Kevin DANCE, Passionists International and NGO Committee on Financing for Development-USA 

Thomas BRENNAN, Salesian Missions-USA 

Faith COLLIGAN, Sisters of Charity Federation-USA 

Eva HANFSTAENGL, Social Justice in Global Development-Germany 

Katrin MCGAURAN, Centre for Research on Multinational Corporations, The Netherlands

Dedi HARYADI, Taxation Advocacy Group-Indonesia 

Nicole TICHON, Tax Justice Network USA

Hans-Rudolf SCHELLER, Tax Justice Network-Switzerland

Richard MURPHY, Tax Research LLP-UK 

Raffaele SALINARI, Terre des Hommes International Federation-Austria

Bhumika MUCHHALA,Third World Network-Malaysia 

Susan GEORGE, Transnational Institute, The Netherlands

Hernán CORTÉS, UBUNTU Forum-Spain

Catherine FERGUSON, UNANIMA International-USA

Daniel LEBLANC, VIVAT International-USA 

Josep XERCAVINS, World Democratic Governance-Spain