Four definitions to change the world webinar series: Harmful tax practices

Tax practices adopted by one country often have extraterritorial effects, shaping other countries’ ability to enforce their own tax rules and pursue policy goals such as tax progressivity, a fair treatment of all taxpayers and citizens, and the financing of public services. Since the 1990s, OECD countries have sought to address harmful tax practices. A key moment was the OECD’s 1998 Harmful Tax Competition, which led to the creation of the Forum on Harmful Tax Practices which was later subsumed into BEPS Action 5 and the Inclusive Framework. Decades later, the OECD process has failed to curb harmful tax practices – triggering the pursuit of a different approach at the UN now underway. 

From their inception, however, OECD-led initiatives received criticism that the criteria used to identify harmful regimes are self-serving: regimes that affect the bulk of OECD countries are weeded out, yet regimes adopted by OECD countries with detrimental effects on Global South countries are left untouched. Thus, in addition to facing criticism for their unfairness, they also created concerns around their effectiveness. As the UN negotiations of the harmful tax practices commitment have shown, a fundamental reconsideration of the concept of harmful tax practices is long overdue. An inclusive and universal approach to tax cooperation requires new ways to look at the negative spillovers felt abroad from national tax policy making. It also requires more transparency on the local societal costs of harmful tax practices, which are often hidden from the public eye. 

This panel will briefly revisit past efforts, examine how the issue is being addressed in current negotiations at the United Nations, and explore how a more inclusive and effective framework for tackling harmful tax practices might be built, starting with the current formulation of the harmful tax practices commitment in the Framework Convention. 

Speakers

Professor Steven Dean, Prof. of Law, Paul Siskind Research Scholar, Boston University

Ms. Marlene Nembhard Parker, Deputy Commissioner General at Tax Administration Jamaica´ Legal Services Division, Co‑Lead of Workstream III (Prevention & Resolution of Tax Disputes) and main delegate for Jamaica at UN Tax Negotiations

Senator Hon. Mr Leo Ryan Pinder, Office of the Attorney General & Ministry of Legal Affairs of the Bahamas

Moderator

Sergio Chaparro-Hernández, International Advocacy and Policy Lead, Tax Justice Network