Video: We must improve the governance of the international tax system

15 June, 2015

José Antonio Ocampo at the ICRICT panel in Trento, Italy

José Antonio Ocampo, Former UN Undersecretary-General, Former Minister of Finance of Colombia and currently Professor, Colombia University, at the ICRICT panel in Trento on 2 June, explains to us the main points of the ICRICT report.

He tells us that the current system of taxing the global profits of multinational corporations is broken and that we must deeply reform the institutions that govern the way corporations pay taxes. He says that this is a question of equity between good and bad taxpayers and that paying taxes is an essential corporate responsibility.

Ocampo says that the basic recommendation in the report is the separate entity principal. In the long-term, the only way to get a fair tax system is to reject the artifice that corporation’s subsidiaries and branches are separate entities.  It is important to tax multinationals as single firms.

The G20/OECD BEPS project is a step in the right direction, especially to improve transparency, however, the OECD is an institution not representative of the international system and does not give a fair voice to countries.

A few other recommendations include: curbing tax competition by agreeing on a minimum corporate tax rate, increasing transparency so that there is country-by-country reporting, reforming tax treaties and improving the governance of the international tax system. The UN Committee of Experts on International Cooperation in Tax matters should be upgraded to an intergovernmental Commission. Member states should start drafting a UN convention on how to stop tax abuses by corporations

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