FOR IMMEDIATE RELEASE
July 17, 2015
Rich Countries Chose the Interests of the Powerful
Over the Needs of the People in Rejecting U.N. Tax Body
Washington, DC – The FACT (Financial Accountability and Corporate Transparency) Coalition today expressed its frustration and disappointment over a missed opportunity to form a United Nations Intergovernmental Tax Body as participants at the 3rd Financing for Development Conference (FfD) in Addis Ababa, Ethiopia failed to come to an agreement.
The idea of creating such an entity was discussed at the FfD. However, the United States, along with Japan and several European nations were resisting the idea.
Creation of a universal, well-resourced, UN Intergovernmental Tax Body is critical to the ability of developing countries to implement sustainable tax systems within their borders. It is estimated that for every dollar of foreign aid a developing country receives, ten dollars of capital flow out of the country through illicit means, a significant portion of which is trade mis-invoicing. These countries must be able to develop the tools to stem the tide of illicit capital flows, including tax avoidance and evasion. An intergovernmental tax body would be an enormous help with these problems.
Currently, standards to combat these activities are set by the Organization for Economic Cooperation and Development (OECD). The issue is that 34 of the wealthiest countries in the world constitute the OECD, whereas at the UN, the decision-making process would be expanded to over 100 developing countries that have thus far been excluded from the decision-making process.
“One would expect the United States to protect its own tax base, but that’s not what is happening here,” said Rebecca Wilkins, executive director of the FACT Coalition. “The United States, United Kingdom and others are unwilling to challenge the reality of multinational companies dodging their tax obligations everywhere around the world. They have chosen to defend the interests of the rich and powerful over the needs of people around the world, including their own citizens.”
The FACT Coalition is also communicated its concerns to Treasury Secretary Jack Lew, who was attending the conference in Addis Ababa. The full text of the letter can be found here.
Founded in 2011, the Financial Accountability and Corporate Transparency (FACT) Coalition unites civil society representatives from small business, labor, government watchdog, faith-based, human rights, anti-corruption, public-interest, and international development organizations. We seek an honest and fair corporate tax code, greater transparency in corporate ownership and operations, and commonsense policies to combat the facilitation of money laundering and other criminal activity by the financial system.