By: Tax Justice Network
October 7, 2019
The OECD’s highly anticipated proposal for reform of international tax rules will likely further intensify global inequalities and fail to curb rampant tax abuse, new analysis reveals. The OECD’s reform plan is expected to reduce profits booked in corporate tax havens by just 5 per cent, and redistribute the proceeds largely to the richest countries – despite the fact that lower-income countries currently lose a higher share of their tax revenues to corporate tax abuse.1 High income countries stand to receive around 80 per cent of the redistributed profits as tax base. Upper-middle income countries are expected to see some benefit, but lower-middle income countries are projected to see their tax bases actually shrink by 3 per cent.
The analysis, carried out by Alex Cobham (Tax Justice Network), Tommaso Faccio (University of Nottingham) and Valpy Fitzgerald (University of Oxford) and commissioned by the Independent Commission for the Reform of International Corporate Taxation (ICRICT2), compares what is currently known about the OECD proposal3 with two other leading proposals for reform – one by tax justice campaigners4, and one put forward by the International Monetary Fund (IMF). The analysis is published on the same day that ICRICT released a technical critique of the OECD’s proposals.5