Linkage between tax transparency and information critical for sustainable development
The link between global tax transparency and domestic resource mobilization was a key issue discussed at the sidelines of the Financing for Development conference.
The side event, jointly organised by the Organisation for Economic Cooperation and Development (OECD) and UN-DESA,was attended by President of the African Development Bank, Donald Kaberuka, eminent ministers and officials from OECD member countries, and observer organisations.
The July 14th 2015 meeting sought to explore ways of improving tax transparency, an important driver of domestic resource mobilization.
Panelists reiterated the need for governments to give their tax administrations the resources they need to access information flow. This would enable them to carry out audits of cross-border transactions. Automatic Exchange of Tax Information across countries was perceived as key in clamping down on tax evasion.
There are reportedly more than 3000 tax information exchange agreements in place. These serve as tools for governments to track transfers between financial accounts across the world.
The meeting heard that the new tax transparency standard, launched in 2014 to aid Automatic Exchange of Information, will allow authorities to access information required to track funds held overseas that were previously unknown.
This can boost the tax revenues needed to invest in infrastructure and human capital that is necessary to foster sustainable development.