29/11/22

INTERNATIONAL TAX: Tax campaigners pin their hopes on UN action.

As published on royalgazette.com, Tuesday 29 November, 2022.

Tax campaigners said a recent Court of Justice of the European Union decision may have weakened EU/OECD anti-money laundering efforts, but the battle over the right to freely access information on beneficial owners of private companies has now moved to the United Nations, after a consensus vote at the General Assembly’s 77th session.

The London-based Tax Justice Network views the court ruling as “a bump in the road” but useful to their cause.

Alex Cobham, the TJN chief executive admits his people did not see the EU Court ruling coming.

But he believes there is potential for a silver lining in the recent developments, because EU countries will be forced to look more carefully at their own shortcomings as they work towards a more equitable global tax system.

He told The Royal Gazette: “We may look back and say that between the one piece of good news and the one piece of bad news, in a sense both may have actually been good steps on the road towards that more inclusive decision-making that ultimately we need.”

He said that all facets related to the issue would now get a full airing, as opposed to the limited arguments on which the court based its decision.

The same week the court ruled, a resolution was approved by consensus at the 77th session of the United Nations General Assembly aimed at “an inclusive, democratic and transparent process to reform global tax architecture”.

The approved proposal for consideration of international tax co-operation at the UN, floated by African nations, includes an intergovernmental tax negotiation process at the UN, which would allow all countries to participate in discussions and decision-making related to tax, on an equal footing.

They argued that too many decisions relating to global tax had been steered by the same countries.

And they found broad agreement in Brussels from the Civil Society Financing for Development Group.

They quoted Tove Maria Ryding, tax co-ordinator at the European Network on Debt and Development: “Some rich countries are still holding on to the archaic idea that they can keep global rule-making on tax under the control of the OECD – also known as the rich countries’ club.

“But today’s vote shows that at the end of the day, they know they cannot stop the development towards inclusive, transparent and UN-led tax governance, which is already highly overdue.

“The OECD-led governance is coming to an end – both because it was deeply unjust and biased in favour of a few rich countries. But also because the OECD has so blatantly failed to stop international tax abuse.”

Meanwhile, Mr Cobham said this could be a turning point in the collective effort at tax justice.

He is certain that it must include publicly accessible beneficial ownership registers and an agreement on a minimum corporate tax for all countries.