Osborne hails 'remarkable progress' made in global tax co-ordination

CHANCELLOR George Osborne has welcomed the striking of an Organisation for Economic Cooperation & Development (OECD) agreement to automatically share tax information on individuals by the year 2018. “Tax evasion can only be tackled with a global solution,” he told journalists at the OECD Global Forum on Transparency and Exchange of Information for Tax Purposes meeting in Berlin.

“It’s remarkable how much progress has been made in a short period of time, in a field that usually takes decades,” said Osborne. “This will reduce the places that tax evaders can hide their money. Tax evasion is not just illegal, it’s immoral.”

He welcomed the fact that UK crown dependencies such as Jersey and Guernsey, and overseas territories such as the Cayman Islands, had been full involved in the process.

Noting that some countries had yet to join the 123-member forum (including Palau, Maldives, Haiti, Paraguay, a majority of African countries and others), Osborne said: “I call on the last remaining financial centres to match our commitment and hold themselves to the same high standards that we’re committing ourselves to.” He argued that the developing world would benefit from a “truly global standard of tax transparency”.

Meanwhile, OECD secretary general Angel Gurría said that the voluntary exchange of tax information developed since 2009 had already yielded significant results: “It’s happening before we go automatic.” He said that an additional $37bn (£23.1bn) has flowed into government coffers worldwide as a result. In 2008 there were around 40 agreements on tax data exchange, now there were 3,000, said Gurría.

As regards the OECD’s development of guidelines on BEPS (base erosion and profit shifting), seven chapters were already available and a further 15 would be delivered next year, he claimed.

“There’s a momentum that this can be done,” said the secretary general, “Let’s keep up the good fight against tax evasion.”
German finance minister Wolfgang Schäuble said the agreement was an effective “response to tackle the lack of governance in global tax matters.”

Schäuble said: “We’re creating more transparency and more justice in this globalising world. We need single global standards. It’s not fair to have people whose tax is withheld at source while others shift their income across the world to avoid tax. It’s not fair for a multinational firm to pay less tax than an ordinary citizen.”

The creation of automatic exchange would, he agreed “require a lot of investment”. In Germany alone, he suggested €20m (£15.7m) would need to be spent on the process.