In response to issues of tax evasion and to solidify the importance of taxation in the debate to achieve the UN sustainable development goals (SDGs), the world’s biggest international organizations have agreed on a platform to formalize regular discussions on the design and implementation of standards for international tax matters.
According to the International Monetary Fund (IMF), It is cooperating with the Organisation for Economic Co-operation and Development (OECD), the United Nations (UN) and the World Bank Group (WBG) in a joint effort to intensify their cooperation on tax issues. It is conceived under the Platform for Collaboration on Tax’.
BusinessDay learnt that the Platform will not only formalize regular discussions between the four international organizations on the design and implementation of standards for international tax matters, it will strengthen their capacity-building support, deliver jointly developed guidance, and information-sharing on operational and knowledge activities.
This effort comes at a time where the release of the Panama papers is causing serious ripples in countries where it is shown that government officials and their relatives used offshore business entities to evade tax.
Iceland’s Prime Minister Sigmundur David Gunnlaugsson resigned over the crises. His party said “The prime minister told (his party’s) parliamentary group meeting that he would step down as prime minister and I will take over,” announced Sigurdur Ingi Johannsson, his deputy in a live broadcast on April5..
The Panama Papers are a set of 11.5 million confidential documents detailing information about more than 214,000 offshore companies compiled by the Panamanian corporate service provider Mossack Fonseca, including the identities of company shareholders and directors.
The documents show how wealthy individuals, including Nigerians, and public officials, hide assets from public scrutiny. At the time when the report was released, the papers identified five then-heads of state or government leaders from Argentina, Iceland, Saudi Arabia, Ukraine, and the United Arab Emirates as well as government officials, close relatives, and close associates of various heads of government of more than forty other countries.
While the use of offshore business entities is not illegal in the jurisdictions in which they are registered, during their investigation, International Consortium of Investigative Journalists (ICIJ) who were instrumental to the release of the documents found that some of the shell corporations may have been used for illegal purposes, including fraud, drug trafficking, and tax evasion.
The move by the international organisations, endorsed by the G20 finance ministers at their February meeting in Shanghai, according to the IMF will seek both more capacity support and greater influence in designing international rules.
Among the Platform’s first tasks will be to deliver a number of ‘toolkits’ designed to help developing countries implement the measures developed under the G20/OECD
Base Erosion and Profit Shifting Project and on other international tax issues. The first of these toolkits, focusing on tax incentives, was delivered in November.
There will be an important link to the new BEPS implementation framework. Platform members will hold regular meetings with representatives of developing countries, regional tax organizations, banks and donors. Consultations with business and civil society will be organized as needed.
ISAAC ANYAOGU
