G20 Countries request CIAT –and other organizations– to support the development of more effective tax systems

The G20 during its meeting in Seoul, Korea 11 – 12 November 2010, discussed global financial issues and the post crisis global economy including the request to the international and regional organizations relating to the development and greater effectiveness of the tax system, in terms of strengthening tax regimes and fiscal policies in developing countries, which is contained in Annex II of its Declaration, with five relevant guidelines, as follows:

DOMESTIC RESOURCE MOBILIZATION

 

It is essential to continue to strengthen tax regimes and fiscal policies in developing countries to provide a sustainable revenue base for inclusive growth and social equity, as well as to enhance the transparency and accountability of public finances.

 

ACTION 1: SUPPORT THE DEVELOPMENT OF MORE EFFECTIVE TAX SYSTEMS

We ask the expanded OECD Task Force on Tax and Development, UN, IMF, World Bank and regional organizations such as the Inter-American Center for Tax Administration and African Tax Administration Forum and other relevant organizations to:

 

  • Identify key capacity constraints faced by developing countries in their tax systems and make recommendations on capacity building to (i) improve efficiency and transparency of tax administrations and (ii) strengthen tax policies to broaden the tax base and combat tax avoidance and evasion (June 2011);
  • Develop a knowledge management platform and promote South-South cooperation to support the capacity of developing countries in tax policy and administration systems (Medium-term);
  • Survey and disseminate all G20 and international organizations’ actions on supporting tax systems in developing countries (June 2011);
  • Set up objective measures to track progress in the capacity improvement of LICs’ tax administration systems (June 2011); and
  • Identify ways to help developing countries’ tax multinational enterprises (MNEs) through effective transfer pricing. (June 2011)

 

The results will be reported at the Summit in France. (November 2011)

 

 

ACTION 2: SUPPORT WORK TO PREVENT EROSION OF DOMESTIC TAX REVENUES

We ask the Global Forum to enhance its work to counter the erosion of developing countries’ tax bases and, in particular, to highlight in its report the relationship between the work on non-cooperative jurisdiction and development. (Medium-term)

 

The results will be reported at the Summit in France. (November 2011)

In this regard, we are pleased to note that directly or indirectly the majority of these guidelines of the G20 are reflected in CIAT’s current Strategic Plan for 2010-2013 and consequently, partially in the Annual Operating Plan – AOP – current running until June 2011.

Along these lines, and considering that we are currently reformulating the 2011-2012, AOP and its associated budget to be presented at the April 2011 General Assembly, to be held in Quito, Ecuador, we are considering these guidelines within the priorities to be developed during next year.

CIAT must inform its course of action to the Coordinating Committee of the G20, having until June 2011, so it can be discussed during the next meeting of the G20 already scheduled for November 2011, in France.

This Executive Secretariat believes that the express mention of CIAT by the G20 in its Declaration of Seoul represents recognition of the role of CIAT and the positioning of our Organization to the international tax community that we have been promoting with emphasis since 2010, with the support of all CIAT member countries and associate member countries.

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