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Better late than never: the OECD takes measures to facilitate developing countries’ participation in the G20 BEPS Action Plan on tax avoidance

13/11/2014

On 12 November 2014, the OECD announced new measures to increase the participation of developing countries in the implementation of the G20-endorsed Base Erosion and Profit Shifting (BEPS) Action Plan. Launched a year ago, the BEPS Action Plan has so far been steered by the G20 countries alone – all of which are represented in the OECD Committee on Fiscal Affairs (CFA) and its various working groups. The ability of developing countries (other than the big emerging economies member of the G20) have been limited to a couple of ad hoc regional conferences, which has raised serious concerns by NGOs and by trade unions.

Better late than never, the new measures are threefold:

  • About 10 developing countries (incl. Albania, Jamaica, Kenya, Nigeria, Peru, Philippines, and Tunisia) are to participate in the CFA-related meetings in Paris as observers, alongside  the African Tax Administration Forum (ATAF) and the Inter-American Centre for Tax Administration (CIAT).
  • Five formal BEPS regional networks are created based on existing groupings: the above ATAF and CIAT, as well the Study Group on Asian Tax Administration Research, the Intra-European Organisation of Tax Administrations and the Centre de rencontre des administrations fiscales.
  • Last, but not least, additional resource are expected to be raised to help support institutional capacity  of developing countries in address the BEPS issues. It is understood that the OECD Secretariat would allocate additional resources for staff working full-time to asset the group of 10 countries.

It is understood that a two-day workshop is to be held on 10 December 2014 at the OECD in Paris to kick start the process and to engage with the group of 10 developing countries to discuss practical aspects with the CFA. The announcement by the OECD Secretariat also comes with a call for the development cooperation community to address capacity constraints of developing countries.

The OECD initiative is timely, but its needs to be translated into concrete actions anytime soon. The BEPS Action Plan is a 2-year process only, with less than 12 months remaining and with a very dense agenda in the first half of 2015. The commitment to raise capacity building and resource should be fulfilled urgently.

Civil society matters as well. As the process unfolds, there should be some assurance that relevant NGOS and trade unions from the developing countries will be able to participate and engage effectively, both at the OECD in Paris and in the regional networks.

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