Level Playing Field Not Yet Achieved, OECD Meeting Concludes

by Mike Godfrey, for LawAndTax-News.com, Washington

17 October 2003

In a closing statement released on Wednesday by the co-chairs of the Organisation for Economic Cooperation and Development's Ottowa meeting, deputy Prime Minister and Finance Minister of the Cook Islands, Dr Terepai Maote, and chair of the organisation's Committee on Fiscal Affairs, Gabriel Makhlouf, it emerged that the majority of OECD members believe that a level playing field has not yet been achieved with regard to the combating of tax evasion.

The two men announced that:

"Virtually all participants reaffirmed their commitments to the principles underlying the exchange of information standard and acknowledged the need to continue their discussions to establish bi-lateral mechanisms for effective exchange of information. They agreed that the level playing field is fundamentally about fairness."

The statement continued:

"Participants acknowledged that progress had been made but recognised that a global level playing field does not yet exist and that further progress could and should be made to achieve it, so that all countries can reach the high standards which the participants wish to see achieved. In particular, they agreed that ways should be explored to involve significant financial centres that are not currently participating in the Global Forum process. An important part of the process would be to review what standards financial centres currently apply and where further progress might be required."

Despite revealing that participants in the talks "agreed to work intensively over the coming months to progress the global level playing field issue and the broader question of improving the process by which this work can be accomplished", Mr Makhlouf admitted that:

"There were two countries that expressed their concerns and suspended their commitments."

According to reports in the international media, one of the countries to pull out was Antigua and Barbuda, and the other was not named.

"One said they were going to continue to work with various OECD countries on information exchange," Makhlouf explained, adding that:"The other country didn't make a distinction."

Andrew Quinlan, president of US think-tank, the Center for Freedom and Prosperity, welcomed the obstacles encountered by the OECD, observing on Wednesday that:

"The OECD's tax harmonization effort has hit a brick wall, and this is good news for the global economy. If high-tax nations are worried that jobs and capital are fleeing to low-tax jurisdictions, they should fix their bad tax laws rather than trying to create a global tax cartel."

The full text of the Notice is available in the Tax News Resources Section.

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