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Home Global Economic News Global Developing countries to benefit from tax haven crackdown
Developing countries to benefit from tax haven crackdown PDF Print E-mail
Written by Gary Howes   
Monday, 27 April 2009 11:01
Global Economic News: OECD head says a crackdown on tax havens and cross-border tax evasion will help developing countries to raise more revenues.

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The comments on the tax haven crackdown were made by OECD Secretary-General Angel Gurría in a bid to push forward the case for compliance by some developing countries.

In an article published on the OECD’s website ahead of the 2009 spring meetings in Washington of the World Bank Group and the International Monetary Fund, Gurría said improving the effectiveness of developing countries’ tax systems is the “new frontier” in development policy.

Moves to end revenue leakage to tax havens would help developing, as well as developed, countries, Mr. Gurría said. In parallel, he called on aid donors to support a strengthening of developing countries tax systems and tax administration through increased targeted aid.

Tax policies now feature alongside trade and aid as one of the principal focuses of policy discussions in the development area. The role of tax havens in siphoning of tax revenues from developing countries has come under increased scrutiny amid efforts to crack down on cross-border tax evasion.

Earlier this month, the G20 announced its intention of taking action against non-cooperative jurisdictions, including tax havens, that failed to implement international standards of transparency and exchange of banking information for tax purposes.

These standards, developed by OECD and non-OECD countries in the context of the OECD’s Global Forum on Taxation and endorsed by G20 Finance Ministers in 2004 and by the UN Committee of Experts on International Co-operation in Tax Matters in October 2008, require exchange of information on request in all tax matters for the administration and enforcement of domestic tax law without regard to a domestic tax interest requirement or bank secrecy for tax purposes.  They also provide for extensive safeguards to protect the confidentiality of the information exchanged.

In recent weeks, numerous jurisdictions have announced commitments to implement these standards, but many still have to back up these pledges with action on the legislative and administrative front.

Gurría promised that the OECD, which has been tasked with monitoring jurisdictions’ performance, would be “watching like a hawk” to ensure compliance.