Jun 09 2011

Developing countries – flexing their tax muscles?

Posted by: Nick Shaxson in: Thoughts

I wrote an article a little while ago entitled “Developing countries are finding their voice” which looked at calls from the developing world for there to be

“no more Rule Makers forcing Rule Takers to accept what the Rule Makers decide.”

Activism on international tax by developing countries has happened in phases. The most important came with the emergence of OPEC in the 1970s, which saw resource-rich countries realise that they had tremendous power – and the ability to appropriate much of the value of their exports for themselves. They didn’t always put those resources to good use, of course – though that’s another story (covered in this excellent book by, er, me.) There has also been some past activism IMF advice to countries to cut tariffs, as part of its free trade agenda, though that’s a rather different arena again.

But outside these relatively specific (!) areas, things have been very different. Until very recently – and I believe that work by the Tax Justice Network, Global Financial Integrity and their allies has contributed to what looks like the start of an awakening in this respect – most developing countries paid little serious attention to international tax, and were content to let the OECD – a club of rich countries – call the shots. Those shots, of course, tended to benefit rich countries and frequently disadvantage poor ones.

Now I’ve just written another article summarising a hard-hitting speech by David Spencer at the United Nations, which continues the theme and excoriates the OECD on international tax issues. For those interested in developing countries, and with a stomach for a little bit of technical detail, not too much, I think it’s well worth a read. It’s here.

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