“The Group for Financial Cooperation and Growth (OECD) is nothing lower than a Membership of the world’s wealthiest international locations which is set to bend powerless international locations to its will.” I wrote that assertion in 2002 after 4 years of negotiations with the OECD in opposition to its unilateral imposition of a regime to counter what it referred to as the ‘Dangerous Tax Competitors Initiative (HTCI)”, launched in 1998.
Sadly, in 2001, it succeeded in imposing its arbitrary HTCI, which killed the supply of worldwide monetary providers by growing nations, together with the Caribbean, by threatening and imposing sanctions on international locations that attempted to face up for his or her sovereign proper to set their tax ranges. It was aided on this unjust motion to determine itself as the one international rule maker on taxation by the absence of a strong and united resistance from growing international locations.
Since then, there was no finish to the OECD’s relentless – some could say, ruthless – efforts to regulate and dictate tax ranges for the remainder of the world. Right now, the OECD, comprising 38 of the world’s 180 nations sti, is obstructing international locations that don’t adjust to the so-called “requirements” that it units, utilizing a mechanism euphemistically named “The World Tax Discussion board,” by which many growing states have grow to be complicit of their lack of autonomy on tax issues.
The 27 European Union (EU) member states are a robust and important bloc within the OECD, outnumbering different international locations by 11 votes. Among the many different 11 members are the US, Canada, Japan, Australia, and, sadly, Chile, Colombia, Costa Rica, and Mexico from Latin America. When the EU fails to safe OECD endorsement of any of its ambitions, it implements its personal.
In September 2000, Sir Lester Fowl, the late Prime Minister of Antigua and Barbuda, whose nation had battled courageously in opposition to the dictates of the OECD, declared within the UN Normal Meeting (UNGA) that OECD motion on international taxation was opposite to worldwide legislation. He referred to as on the OECD “to resolve to halt its insidious course of and place any dialogue on tax points on this multilateral discussion board (the UN) the place it rightly belongs.”
His name went unheeded. And, over the next 23 years, the OECD has dictated taxation guidelines. The monetary providers sector in growing states was decimated at a excessive value, which continues to mount because the OECD instigates self-serving international directives.
Then, in 2022, fifty-four African nations, led by Nigeria, pissed off by the OECD’s stranglehold, efficiently introduced a decision to the UNGA, recommending that the UN Secretary-Normal produce a report on “the promotion of inclusive and efficient worldwide tax cooperation on the United Nations.” Inspired by the admission within the report that the UN has a job to play and its identification of three choices that might be adopted, the Africans submitted one other Decision, looking for to wrest management from the OECD.
The Decision, entitled “Promotion of Inclusive and Efficient Worldwide Cooperation on the United Nations, was adopted on November 22, 2023, by a vote of 125 in favor, 48 in opposition to, and 9 abstentions. Ten international locations, surprisingly together with Dominica and Venezuela, absented themselves.
Naturally, all 27 of the EU states voted in opposition to the Decision. They have been joined by the US, the UK, Japan, and different international locations with dependent stable, financial, or army hyperlinks to the OECD nations. Nevertheless, it’s notable that Mexico and Costa Rica – each OECD members – abstained from the vote.
The query is, what occurs now? One certainty is that the highly effective states of the OECD won’t permit worldwide taxation to be taken from their management by putting it within the UNGA. Even earlier than the Decision was adopted on November 22, the massive OECD international locations had been working in opposition to it. That work will proceed of their typical means – by means of coercion and inducements to interrupt the resolve of the growing international locations that so overwhelmingly voted for the decision.
The highly effective states of the OECD have till August 2024 to divide and rule growing international locations once more. By that point, an ad-hoc working group will likely be answerable for drafting phrases of reference for a UN framework conference on worldwide tax cooperation. Undoubtedly, the massive OECD international locations will area their hardest negotiators; growing international locations, together with the Caribbean, should do the identical.
The massive OECD international locations are the principal advocates of the deserves of competitors within the provision of products and providers on the earth as a result of their industrial and agricultural capability has reached the purpose the place they want unrestricted entry to international markets to fulfill their increasing and growing home monetary challenges. However whereas they promote competitors within the areas of their aggressive benefit, they decry it in taxation, which is the final frontier of autonomy for growing international locations.
Already, the massive OECD international locations are disparaging the Decision, determined to make it fail when it’s thought of by the UNGA in 2024. The language getting used is remarkably misleading. As an example, a UK consultant is reported to have stated, “If we’re to ship an improved tax system by means of the UN neighborhood, there should be the broadest attainable buy-in from the beginning.” Regrettably, that proclamation didn’t apply to the OECD’s guidelines and requirements, which its members developed by themselves and which they now strain growing nations to simply accept.
Pursuing a good, simply, and equitable worldwide tax system is paramount. This method ought to mirror all international locations’ wants, priorities, and capacities, contemplating the distinctive challenges confronted by areas like Africa, the Caribbean, and the Pacific.
Hopefully, this time – the worldwide south international locations, together with the Caribbean, won’t sacrifice their long-term curiosity for short-term crumbs. The OECD of 38 nations shouldn’t dictate phrases for the opposite 142 states worldwide. That enterprise ought to rightly reside within the UN.
*(The author is Antigua and Barbuda’s Ambassador to the USA and the Group of American States. His views are fully his personal.)
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