Citing an enormous loss of $100 to $240 billion dollars in uncollected global corporate income tax revenues each year, Oh Joon, President of the United Nations Economic and Social Council (ECOSOC) today stressed the need to curb tax evasion and avoidance and called for stronger international tax cooperation.
“Taxation represents a stable and predictable source of finance. Complemented by other sources, it is central to financing development needs and providing public goods and services,” said Mr. Oh in his remarks to the joint meeting of ECOSOC and the UN General Assembly’s Second Committee, the world body’s main forum for discussions on economic and financial issues.
The joint meeting held under the theme ‘Domestic Resource Mobilization: Where to go after Addis?’ identified resources and challenges to finance sustainable development.
“The challenge is that many countries are hindered in their efforts to collect their taxes. Business models and value chains have become more international, integrated and dependent on intangibles. They have given rise to a number of loopholes in the area of taxation,” said Mr. Oh adding that tax evasion and avoidance pose a great threat to financing sustainable development. Oh said that as per the recent Organisation for Economic Cooperation and Development (OECD) estimates, between four to ten per cent of global corporate income tax revenues are lost annually, totalling to the amount of $100 to $240 billion.
He added that the loss is felt stronger in developing countries with greater needs for investment in development. Oh stressed on stronger international cooperation to combat tax evasion and avoidance and added that the lack of information exchange between the countries is a huge opportunity for tax avoiders and evaders.
He added that discussions on the current landscape of international tax cooperation can help identify priorities for reform and make concrete suggestion for improved international cooperation. Oh also recalled that in the Addis Ababa Action Agenda, UN Member States had decided to enhance the resources of the UN Tax Committee to strengthen its effectiveness and operational capacity. Oh announced that the Tax Committee will meet twice a year and will also increase its engagement with ECOSOC through the Special Meeting on International Cooperation in Tax Matters.
Lastly, Mr. Oh called for the continued engagement of all relevant stakeholders, as “this is the only way to ensure that the responses to international tax challenges can gain sufficient global ownership, and confirm the faith of honest taxpayers in their tax system and their government.”