|On Friday, 19 October 2012, Core Group partners of the International Tax Compact (ITC) met in Amsterdam to discuss strengthening their support to developing countries in improving tax policy and to fight tax evasion and tax avoidance.
Participants shared encouraging experiences in this field at the national and regional levels in Africa, Latin America and Asia, as well as at the global level. Numerous countries have already made substantial progress in reforming their tax policies and administrations and in raising their tax revenues, in order to broaden the fiscal space for poverty reduction and development investment. However, the complex problems of transfer pricing, double taxation, cross-border financial transactions, illicit financial flows and exchange of information between governments, as well as domestic obstacles such as inadequate commitment, capacity, assistance and infrastructure for tax policy design and enforcement, still constitute great challenges for most developing countries. The ITC Core Group partners discussed and identified concrete steps to further support developing countries in facing these challenges and to further enhance coordination and harmonisation in respective projects and programmes.
Participants stressed the importance of keeping the issue of domestic resource mobilisation high on the international development agenda, especially in the G-20 context, as well as the discussions on the Post-2015 UN Development Agenda and the Follow-up to the Busan Partnership for Effective Development Cooperation.
The meeting was attended by representatives of the African Tax Administration Forum (ATAF), the Inter-American Center of Tax Administrations (CIAT), France, Germany, the Netherlands, Norway, Spain, United States, the European Commission, the United Nations (UNDESA and ECLAC), the International Monetary Fund (IMF), the World Bank (WB), the Organisation for Economic Co-operation and Development (OECD), the International Tax Dialogue (ITD) and the Global Forum on Transparency and Exchange of Information for Tax Purposes. The meeting was jointly hosted by the ITC, the Ministry of Foreign Affairs of the Netherlands and the European Commission.
Shortly before, on 15 October, these issues have also been considered by the EU’s 27 development ministers who have decided to systematically incorporate tax administration into policy dialogue with partner countries and support tax policy, administration, collection and reform. The EU and their member countries will help to combat illicit capital flows and identify misuse of transfer pricing, as well as encourage EU companies working in developing countries to “pay their fair share in taxes” and “improve the transparency of their payments to governments”. The International Tax Compact will support these endeavors.
In 2012, the ITC has carried out numerous activities with partners in Africa, Latin America and Asia. The next ITC events planned are on the 5-6 November 2012 in Antigua, Guatemala, on “Fiscal Policy in Central America”, organised together with ECLAC, CIAT and the Central Institute for Fiscal Studies (ICEFI) and under the auspicies of the Ministry of Finance of Guatemala; on the 22-23 November 2012 in Montevideo, Uruguay, on “Methodologies for Measuring Tax Evasion”, organised together with ECLAC and the Internal Revenue Service of Uruguay; and on the 27-28 November in Jakarta, Indonesia, on “Property Tax”, organised together with the Australian AUSAID and under the auspicies of the Ministry of Finance of Indonesia. In Zambia, a regional workshop on “Tax Incentives” is in preparation, which will give follow-up to earlier events on “Exchange of Information” in Accra, Ghana, and Arusha, Tanzania, organised together with ATAF, OECD, the British DFID and the Secretariat of the East African Community (EAC), respectively. In 2013, ITC activities at the national and regional level will be accompanied by another ITC Global Workshop, venue and date are still to be decided. Ongoing ITC studies are focussed on automation of tax systems and on tax mapping in Asia.
The ITC is a development initiative which serves as an informal and action-oriented international platform to assist developing countries in establishing effective, fair and efficient tax systems and combat tax evasion and inappropriate tax practices on a global scale. For further information please visit the ITC homepage: www.taxcompact.net.
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