By Ed Stoddard
JOHANNESBURG, June 28 (Reuters) – Some of the money Africa
loses through artful officials diverting cash into offshore tax
havens could be recovered after a push by the world’s richest
countries to share tax data.
The initiative, unveiled quietly in a report last week by
the Organisation for Economic Co-operation and Development
(OECD), embraces the notion that countries should automatically
share data on taxable income and assets.
It sounds like arcane accounting talk but it boils down to
this: if countries automatically share such as information, tax
dodgers will find it far more difficult to hide their earnings
from their governments.
Among other things this will help reduce Africa’s reliance
on foreign aid since the region could collect more of the
revenue that it generates, cutting its need for assistance.
“Automatic exchange as a tool to counter offshore
non-compliance has a number of benefits,” the report, ‘Tackling
Offshore Tax Evasion,’ said in what some commentators are
hailing as a sea-change in the OECD’s position on the issue.
This is because when it comes to agreements regulating
issues of tax compliance between countries, the Paris-based OECD
club of rich nations has long contended the “internationally
agreed standard” for information exchange was “on request.”
Critics have called this approach toothless because a
government would have to know in advance what it was looking for
if it suspected one of its residents or citizens of avoiding
taxes by moving or keeping money or investments offshore.
Making such information automatic gives fangs to the fight
against tax evasion, which has been sucking poor regions dry.
Continued…
