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Development partners discuss unresolved issues on global tax system

The United Nations and other development partners, Monday, took practical steps to discuss “unresolved issue” of a global tax aimed at combating international tax dodging and illicit financial flows.

The discussion is one of the side-line events at the third “Financing for Development Conference” (FfD), which opened in Addis Ababa, the Ethiopian capital.

Many of the discussants were representatives of non-governmental organisations and advocacy groups.

One of them, Pooja Rangaprasad of the Financial Transparent Coalition, urged governments to take advantage of the conference to create “an equitable tax body to tackle the problem of tax dodging and corporate opacity”.

“But if the status quo remains, and standards continue to be set by the Organisation for Economic Cooperation and Development (OECD), we will be stuck with an unjust system.

“The unjust system cannot solve the problem of illicit financial flows.

“The rest of the world will remain on the outside looking in’’ Rangaprasad said.

The OECD, which is made up of 34 rich countries, said that it was currently setting new standards in multinational profit shifting and cross-border tax dodging.

It tasked government representatives to create an inter-governmental tax body under the UN that would include more than 100 developing countries that are currently excluded from the decision making process.

Another discussant, Alvin Mosioma, who is the Executive Director of the Tax Justice Network, lamented that African nations were at the centre of crisis of illicit financial flows.

He, however, noted these developing nations were not being carried along when decisions on tax matters are being taken.

“A global tax body is one important step in fixing this global problem,’’ Moisioma said.

Maria Ryding, the Tax Coordinator at the European Network on Debt and Development, remarked that the on-going FfD3 conference was the only global platform for countries to decide on how to finance development effectively.

“It makes absolutely no sense that rich country governments are ready to jeopadise the global tax system and the post-2015 climate negotiations, just to make sure that poor countries continue to be excluded from decision making on global tax standards,’’ he said.

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