Reacting to the OECD announcement on its global tax deal, Alex Cobham, chief executive at the Tax Justice Network, said:
“This was a historic opportunity, but the OECD has failed to come anywhere close to the original ambition.
“Pillar 1 goes ‘beyond’ the arm’s length principle, as was promised, for only a sliver of the profits of just 100 multinationals. The tokenistic measure keeps the century-old principle, widely recognised as unfit for purpose, unchanged for almost all multinational profits. Pillar 2 does set a global minimum rate, but so low at 15% that the incentives to shift profit will remain substantial; and with the great majority of revenues captured by the US and just a few others.
“It’s no wonder that Ireland and other havens have embraced the deal, especially after obtaining various concessions. As it stands, it will neither curb profit shifting effectively, nor provide substantial revenues to more than a handful of OECD member countries. Everyone else has been left out – especially lower-income countries which lose the greatest share of their current tax revenues to corporate tax abuse.
“The negotiations have failed to deliver for the people of the world who continue to face the pandemic with public health systems that are badly underfunded. Countries should focus again on taking immediate steps to protect their tax bases. The G20 should swiftly seek a globally inclusive forum at the UN in which to restart negotiations.”
Dereje Alemayehu, executive director of the Global Alliance for Tax Justice, said:
“The OECD’s repeated failure to deliver on its promises – above all, the promise to be ‘Inclusive’ – makes it imperative to bring the negotiations to the legitimate alternative: the United Nations.”
-ENDS-
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Notes to editor
- Read the OECD’s announcement on its global tax deal here.