Fifty-one countries sign OECD pact to tackle tax cheats

Reuters: Finance ministers and tax chiefs from 51 countries signed an agreement on Wednesday to automatically swap tax information, which Germany’s finance minister said heralded the end of tax evasion via secret bank accounts.
“Let’s make a joint contribution to more transparency and fairness in our globalised 21st century,” Wolfgang Schaeuble told a taxation conference of about 100 countries coordinated by the Organisation for Economic Cooperation and Development.
The pledge from so many countries – Schaeuble said there were 51 signatories from four continents, after one country joined at the last minute – is the result of years of OECD efforts to facilitate tax authorities’ access to bank data.
OECD Secretary General Angel Gurria said the taxation deal should “help to recover the trust the public today has lost” during the global financial crisis and economic downturn.
“Tax evasion is not just illegal, it is immoral,” Britain’s Finance Minister George Osborne, told a news conference by the ministers. “You are robbing from your fellow citizens and you should be treated like a common thief.”
Schaeuble had told German newspaper Bild before the talks that the OECD agreement was making tax evasion more difficult, adding: “Banking secrecy in its old form has had its day.”
The European Union has enforced the automatic exchange of interest income since 2005 and America’s Foreign Account Tax Compliance Act (FATCA) has required non-US institutions to provide US tax authorities with data on accounts since 2010.
The United States was not a signatory in Berlin. Gurria said it was having its own internal debate on taxes, but was a “very strong supporter of everything we are doing”.
He added that Switzerland was part of the process but was not one of the 51 states which had agreed to be “early adopters” before the 2018 deadline.
Schaeuble said the OECD deal “would not have been possible without FATCA, which was the trigger for our own process”. The “G5” biggest European economies – Germany, France, Italy, Spain and Britain – have negotiated with Washington for FATCA to be implemented reciprocally.
French Finance Minister Michel Sapin described the Berlin agreement as the “first pillar – fighting tax fraud committed by private people.” “Then we need to reduce tax optimisation by companies,” he added.

 

Small tax on billionaire boom could slow rising inequality – Oxfam

LONDON (Reuters): A small tax on billionaires, whose number has doubled in recent years, would raise enough to ensure an education for every child in the world and slow the rise in inequality, a report published on Wednesday said.
Oxfam said that while the world’s richest people had recovered quickly from the global financial crisis, the benefits of economic growth were not being shared with the majority, including hundreds of millions trapped in poverty.
The world’s richest 85 people, who are worth as much as the poorest half of the global population, saw their collective wealth increase by $ 668 million a day – almost half a million dollars a minute – over the last year, the Oxfam report found.
Oxfam Chief Executive Mark Goldring said a wealthy minority around the world were taking “an ever-increasing share of the pie”, and called on world leaders to close the gap between rich and poor.
The number of billionaires in the world has risen to 1,645 in 2014 from 793 in 2009, according to the report, which cited American business magazine Forbes.
“This is not just an issue of fairness, but in a world where people are dying of hunger or because they can’t afford healthcare, it becomes an issue of life and death,” Goldring said in a statement.
The report calculated that taxing billionaires 1.5% of their wealth over $ 1 billion could raise $ 74 billion a year, enough to get every child in the world into school and to deliver health services in the world’s poorest countries.
Since 2009, at least one million women have died in childbirth because of a lack of basic health services, and around the world 57 million children are missing out on school, the report said.
Seventy percent of the world’s population live in countries where economic inequality is greater than it was 30 years ago, such as South Africa, where inequality is greater than it was at the end of the apartheid era, the Oxfam report found.
Given the current levels of income inequality in African countries, it is estimated that the continent’s poverty rate will not fall below 3 percent of the population – the World Bank’s definition of ending poverty – until 2075.
The report found that inequality within countries is rising rapidly all over the world, with many nations’ richest people earning more, both in absolute terms and relative to the rest of the population.
In India, China and Nigeria, the richest people’s share of national income is large and growing, while the share of more than 1.1 billion people – 16% of the world’s population – is shrinking.
Three million people in Kenya could be saved from extreme poverty in the next five years if the country reduced inequality levels by 12%, the report said.
Goldring said inequality was holding back efforts to end poverty and called it one of the “defining problems of our age.”
“Governments around the world have been guilty of a naive faith that wealth going to those at the top will automatically benefit everyone.
“That’s not true – it is their responsibility to ensure the poorest are not left behind.”
Oxfam called on governments to share the tax burden fairly and tackle tax dodging, promote women’s economic equality and rights and achieve universal free public services by 2020.