Ethiopia

Making the connection: Linking transparency and information exchange to domestic resource mobilisation

 

Third International Conference on Financing for Development

Side event organised by the OECD in partnership with UN-DESA 

Introductory remarks by Angel Gurría,

Secretary-General, OECD

14 July 2015

Addis Ababa, Ethiopia

(As prepared for delivery)

 

Ministers, ladies and gentlemen,

 

It is a great pleasure for me to welcome you to this event to discuss the link between global tax transparency and domestic resource mobilisation – a prime driver of financing for development! 

 

It is a testament to how important this issue is that we have so many eminent Ministers and officials from OECD Global Forum member countries and observer organisations here. The Forum today has 127 members, of which more than half are developing countries. We are working on an equal footing to monitor commitments to global tax transparency standards because, ultimately, this is not simply an OECD issue or a development issue. It is a global issue, and we are very much in it together!

 

A new era in tax transparency

 

Together, we have taken great strides over the past 6 years. It is no exaggeration to say that, as a result, we are now entering a new era in tax transparency.

 

There are now more than 3000 tax information exchange agreements in place. So, governments now have the tools to track transfers between financial accounts across the world. The new tax transparency standard, launched in 2014, for the Automatic Exchange of Information, will allow authorities to access the information they need to track funds held overseas that were previously unknown, and unknowable.

 

The agreements exist; the standard is set; but we need to take further steps to make them operative. Governments need to give their tax administrations the resources they need to access the information flow and thereby carry out audits of cross-border transactions and arrangements.

 

Tax transparency is a development imperative

 

Tax transparency is not just an ethical question, but an economic imperative! And, the reason we are here, of course, is for financing development. As I said at the outset, improving tax transparency can be an important driver of domestic resource mobilisation.  In particular, the move to Automatic Exchange of Tax Information across countries has the potential to transform efforts to clamp down on tax evasion – already tax authorities in two dozen countries have identified more than 37 billion euro in revenue from voluntary disclosure programmes. And with the establishment of Tax Inspectors Without Borders, a new, niche area of technical support is now available.

 

It can boost the tax revenues needed to invest in the infrastructure and human capital needed to foster sustainable development.

 

There is growing recognition of this ‘connection’ here in Africa. The Global Forum’s Africa Initiative, spearheaded by 4 “first movers” – Burkina Faso, Cameroon, Ghana and Kenya -  calls on the continent’s Leaders to make a clear commitment to tackling tax evasion and supporting tax administrations so that they can seize the opportunities heralded by this new era of transparency.

 

But, this is just the beginning! Today, African countries have, on average, only one quarter the number of EOI relationships as European Global Forum members. So far, only two African countries, Ghana and South Africa have committed to implementing the automatic exchange of information standard by 2018. In the years to come, I hope to see “tax transparency” rise to the top of the political agenda across Africa as the social, economic and fiscal benefits become ever clearer.

 

 

Ladies and gentlemen,

 

2015 is a critical year for sustainable development. In just two short months, in New York, we will see the adoption of the SDGs. They will be universal. They will be comprehensive. I am confident they will be ambitious. And, I know they can be transformational!

 

But, to achieve these goals, mobilising resources will be key. This means more and better aid. It means more and better investment. And it means clamping down on tax evaders. In all of these spheres, the OECD is delighted to help deliver better policies for better lives.

 

I will now hand you over to Dr. Kaberuka who - as President of the African Development Bank, and a former Finance Minister of Rwanda - has been on the front line of the resource mobilisation battle for many years. We are delighted to have the benefit of your wisdom and experience. 

 

Thank you!