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OECD's Owens Explains Work Of International Tax Forum

by Jeremy Hetherington-Gore,, London

24 January 2007

Jeffrey Owens, Head of the Centre for Tax Policy and Administration at the OECD, recently explained the work of the organization's Forum on Tax Administration, in South Africa.

Speaking to Moneyweb, he said that the Forum brought together tax commissioners from 40 countries 'to find ways in which national tax systems (can) interact . . . neither to create double taxation or double non-taxation'.

Owens said that only five countries had decided not to talk to the OECD about its efforts to persuade 'offshore' territories to become more transparent: Monaco, Andorra, Liechtenstein, the Marshall Islands and Liberia.

The Forum last met in South Korea in September, when the assembled tax commissioners signed the 'Seoul Declaration', which called for increasing cooperation between tax authorities to detect, deter and respond to international tax noncompliance.

"We are committed to using national, regional and multilateral initiatives to achieve better compliance with tax laws working within the existing framework of bilateral agreements," a joint statement issued by the tax agency chiefs said.

The statement identified four areas in which OECD tax authorities plan to focus in dealing with tax avoidance schemes, including the launch of an international study examining the role of tax-related institutions with regard to non-compliance, to be completed by 2007.

The declaration also sought to establish a cross-border taxation cooperation system to crack down on abuse of tax treaties, and urges member countries to implement a range of administrative reform measures to meet challenges in tax administration. Nine non-OECD countries, including China, India and Malaysia participated in the meeting.

US right-wing groups are fighting against the OECD's efforts to strengthen international taxation mechanisms. In October, the National Taxpayers Union and Americans for Tax Reform sent letters to the Congress urging it to retain language inserted in a State Department spending bill impeding efforts by the OECD or the UN to introduce global taxation, including a provision which would bar the OECD from using the US taxpayer contribution for "activities or projects ... designed to hinder the flow of capital and jobs from high-tax jurisdictions to low-tax jurisdictions or to infringe on the sovereign right of jurisdictions to determine their own domestic policies."

In November, India, Brazil and South Africa agreed to enhance cooperation on tax and customs to help boost trade and economic development while also seeking to thwart smuggling, drug trafficking, fraud and tax avoidance in the three nations.

India’s Revenue Secretary, K M Chandrasekhar, Brazil’s Federal Revenue Secretary Jorge Rachid and South African Revenue Service Commissioner Pravhin Gordhan signed a joint declaration committing their organisations to closer ties across a wide range of areas, on both the revenue and customs fronts.

The declaration was signed at the end of a three-day inaugural meeting of the India-Brazil South Africa (IBSA) Heads of Revenue Administrations to discuss current developments in tax, trade facilitation and customs.

Central to the declaration was an agreement to exchange information between the three revenue authorities to help identify high-risk transactions and to speed up the processing of imports and exports. They also agreed to share information on tax, especially abusive tax avoidance arrangements and schemes, using the Avoidance of Double Taxation Agreements already in place, and to perform simultaneous tax audits on common business entities when necessary.

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