Global Tax Chaos Coming

By tothetick on July 19, 2013

The OECD has stated in a report commissioned by the G20 that there will be “global tax chaos” in the next few years due to falling tax revenues from multinational companies around the world. Perhaps we could have saved a few thousand dollars by not commissioning the OECD report, since we could have all told them that was going to happen. It really does come to something when we waste the money that we don’t have on reports that we don’t need.  Sometimes people get money for old rope it seems. But one other adage is also true: you can’t teach old dog new tricks; the old dog being the multinationals. They are hardly likely to suddenly start paying more tax, are they? Although, maybe someone somewhere will commission a report to see if they will and then discover that they won’t after all. Oh well!

It’s not just that the report has been commissioned when it was probably needless to say more than common knowledge around the world, but also that it has been hailed as a ‘long-awaited’ report that will be used this weekend as the G20 Finance Ministers continue to meet in Moscow along with Central Bank Deputies. They met yesterday and the meetings will continue throughout the day, ending in a Finance-Ministers’ and Central-Bank Governor s’ Meeting on Saturday July 20^th.

The report by the OECD states that there needs to be increased clamping down in corporate tax practices and says that this will be “a turning –point in the history of international co-operation on tax”. In the G8 summit in June 2013, Prime Minister of the UK David Cameron had said that he wanted to crack down on tax havens and bring them into line with other countries, eradicating tax avoidance.

Although the report by the OECD is rather more an analysis of the situation than a solution-finding aid (there are very few actual, concrete proposals that are made), it does state the following:

• Companies should be made to publish tax-avoidance plans so that they can be looked into by authorities who should determine whether they are acceptable or not. Although, that seems rather strange since companies such as Amazon and Google that are writing off their tax are doing so through the exploiting of loopholes that we have allowed to exist still today in an antiquated system.
• Tax havens need to be reformed as they provide for unfair situations for some multinationals (with no suggestion as to how to reform the situation. Any ideas?).
• Read More Here
• Via: Zero Hedge