UN Proposes International Taxation Forum

by Leroy Baker, Tax-News.com, New York

03 November 2003

The United Nations has called for the establishment of a global commission to strengthen international cooperation between governments on the issues of tax policy and tax evasion.

"The growth of business conducted over the internet, of multinational corporations and of cross-border trade in services has had a host of ramifications regarding which national authorities should collect taxes on which activities," UN officials announced at a ministerial meeting on aid, debt and international finance in New York last week.

"There are limits to what individual governments can do about international tax evasion and tax avoidance; governments need to co-operate better to combat these problems," the organization added.

Although acknowledging the efforts of the OECD (Organization for Economic Cooperation and Development) in its fight to combat harmful tax activities, UN under-secretary general for economic and social affairs, Jose Antonio Ocampo, argued that the only body that can facilitate a truly global forum on taxation issues is the United Nations.

The UN warned that tax competition leads to nations "neutralizing each other’s incentives". Secretary General Kofi Annan has proposed the creation of an ad-hoc panel of experts on international tax matters consisting of 25 members that may be upgraded to an "intergovernmental body, in the form of either a committee of governmental experts or a specialized new commission".

However, many observers are skeptical that such a plan is workable in practice, and see it as unlikely that any kind of consensus will emerge between different countries on tax policy.

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