Litany of failure: the OECD’s stewardship of international taxation

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Litany of failure: the OECD’s stewardship of international taxation

This new briefing catalogues the various problematic issues that have emerged through the OECD's leadership of standard-setting in international taxation. These have included failures of inclusivity, failure to address structural racism, shortcomings with regard to accountability and adherence to professional standards, and the manifest inadequacy of its proposed ‘two-pillar solution’. It argues that, in both process and outcome, the OECD has not complied with human rights standards in its leadership of tax negotiations.

With negotiations on a new framework tax convention moving forward at the United Nations, a small group of countries is working hard to water down the ambition of the process. The most ubiquitous argument deployed by those countries – overwhelmingly richer nations which believe they would benefit more from maintaining a dysfunctional status quo – is that the UN process would risk duplicating negotiations at the Organisation for Economic Cooperation and Development (OECD).

The nascent UN talks, which come off the back of an historic resolution brought forward by the Africa Group last year, were brought forward precisely because the OECD’s stewardship of international tax cooperation had systematically sidelined the voices of poorer countries, however. Indeed the UN Secretary General’s report on the issue recognised that “existing international and multilateral arrangements […] do not satisfy the main elements for fully inclusive and more effective international tax cooperation.

It can be argued that the OECD, as an organisation mandated only to represent the interests of 38 advanced economies which make up its membership, was never the appropriate forum to address what is, by its very nature, a complex global problem which disproportionately impacts the Global South.

Failures of inclusivity have not been the only shortfalls to beset the OECD’s stewardship of international tax negotiations, however. This new briefing catalogues the various problematic issues that have emerged through the Paris-based institution’s 60-year dominion over standard-setting in international taxation. These have included failure to address structural racism, shortcomings with regard to accountability and adherence to professional standards, and the manifest inadequacy of its proposed ‘two-pillar solution’. It argues that, in both process and outcome, the OECD has not complied with human rights standards in its leadership of tax negotiations.

This briefing was produced by Tax Justice Network in collaboration with the Center for Economic and Social Rights, Centro de Estudios Legales y Sociales (CELS), the Economic Policy Working Group at ESCR-Net, the Global Network of Movement Lawyers at Movement Law Lab, the Government Revenue and Development Estimations project (University of St Andrews/University of Leicester), Minority Rights Group, Tax Justice Network-Africa, and Steven Dean, Professor of Law, Boston University School of Law.