Your Excellency, Ambassador Collen Vixen Kelapile, President of ECOSOC,
Excellencies,
Distinguished Delegates,
Distinguished observers and Participants,
We now draw to a close the 2022 ECOSOC Special Meeting on International Cooperation in Tax Matters, which UN-DESA has had the honour to support. I would like to thank the Member States, panellists, keynote speaker and all stakeholders who have shared their insights and expertise – and all participants who have joined on the livestream.
We face a new reality shaped by the pandemic, logistical challenges, and new economic pressures. This has only increased the urgency for greater global cooperation, and for the adaptation of tax systems, both domestic and international, to assist the recovery and beyond.
Today’s Meeting has examined two pressing challenges in international taxation These challenges affect everyone but are even greater in developing countries. I look forward to the President’s written summary of the discussions. For the moment, I would like to note a few highlights from each session.
In today’s digitalized and globalized world, the current understanding of corporate taxation is increasingly showing itself to be antiquated.. The discussions and examples shared in this forum highlighted the challenges faced by developing countries in adapting to dynamic multinational enterprise business models, fueled by the spread of new technologies, that no longer require a physical presence to generate profits. However, developing countries are calling for assistance in reform of tax policy and tax administration.
In its examination of the tax aspects of illicit financial flows, the committee addressed another critical challenge – that is, the harsh economic environment created by the COVID-19 pandemic has slowed down countries’ efforts to mobilize domestic resources. The situation has been worse for developing countries that rely on physical tax audits and could not adapt quickly to the new working environment. The ripple effect of the lost working-hours on efforts to fight tax avoidance, tax evasion and illicit financial flows is undeniable. Partnerships and progressive taxation can be the antidote to help close loopholes that drain public resources and thereby mobilize domestic revenue to be able to meet and deliver the SDGs.
Both sessions noted that reforms to regulations regarding tax avoidance and evasion could help end the stratified tax systems that has been exploited by some around the world, making it difficult for countries to provide public goods and services to their vulnerable communities.
Ladies and gentlemen,
In an increasingly digitalized and globalized economy we are constantly reminded that the problems facing developing countries can also affect developed countries and vice versa. The realities and the constraints of the current global economy call for enhanced regional and international tax cooperation; especially to improve transparency. Reliable information is needed to make reliable decisions. It is not a zero-sum game, and good taxation helps both developed and developing countries recover and build resilience for sustainable development.
As this forum comes to a close, I recognize that this productive dialogue could not have occurred without the continued efforts of the UN, the OECD, the IMF and the World Bank, who have contributed separately and together under the umbrella of the Platform for Collaboration on Tax. I must further acknowledge the efforts of regional tax organizations; UN Regional Commissions; and other stakeholders. For years, these stakeholders have supported developing countries in their efforts to overcome the challenges and impacts of the digitalization and globalization of the economy and, as partners, improve the livelihoods of the citizens they represent. Notably, they have pushed to strengthen the capacities of public officials, while fighting aggressive tax planning and safeguarding adequate flows of foreign direct investment for sustainable development.
Allow me to speak on behalf of the Department that I lead, UN-DESA, which supports the UN Tax Committee at the UN Secretariat level. Through its capacity development programme, DESA continues to support developing countries in the uptake and effective use of the practical guidance developed by the Tax Committee. I thank the Norwegian Agency for Development Cooperation (Norad), India, and the European Commission for their support of our work in this area. I call upon other Member States to make contributions to help further increase the impact of UN work on tax cooperation for sustainable development.
Thank you for your attention.