The OECD’s Task Force on Tax and Development was created in January 2010 following the Joint Meeting on Tax and Development between the Committee on Fiscal Affairs (CFA) and the Development Assistance Committee (DAC). Its members - OECD and developing countries, international and regional organisations, civil society and business - have since met in each year, most recently in Seoul, Korea in October 2013. Co-chaired by South Africa and the Netherlands, the role of the Task Force is to advise the OECD Committees in delivering a Tax and Development Programme to improve the enabling environment for developing countries to collect taxes fairly and effectively.
» Overview of the OECD Tax and Development work (pdf)
Areas of work
The Task Force has identified four areas of work as key for developing countries efforts to mobilise domestic resources:
Pillar 1 - State building, accountability and effective capacity development
- Addressing the governance and management of tax incentives. The Task Force has produced draft Principles to Enhance the Transparency and Governance of Tax Incentives for Developing Countries. Consequently, several developing countries have requested OECD support to analyse their tax incentives based on these Principles. In-depth studies provide developing countries with practical recommendations to improve the efficiency of their tax system in terms of its ability to mobilize revenue and attract the right kind of investment. Tunisia, Ghana and Senegal are the first countries to be reviewed. An earlier pilot study in Zambia illuminated the governance challenges in the management of tax incentives.
- A feasibility study on Tax Inspectors Without Borders is a new initiative designed to make tax experts available to developing countries to help with real time international tax audit cases.
Pillar 2 - More effective transfer pricing regimes in developing countries
Effective transfer pricing rules can enable developing countries collect the right amount of tax from multinational enterprises, counter cross-border profit shifting and create a predictable investment climate. A programme of capacity building is underway in Colombia, Ethopia, Ghana, Kenya, Rwanda, Tanzania, Vietnam, and Zambia along with support to regional organisations such as ATAF. These country initiatives are delivered in partnership with the EU and World Bank, and involve working closely with other international assistance. New tools are helping all stakeholders do their work more effectively:
The G20 Development Working Group (DWG) has invited the OECD to write a report on the main challenges of base erosion and profit shifting (BEPS) in developing countries, how these are related to the BEPS Action Plan, and how the DWG might assist low income countries to meet those challenges (terms of reference). Part 1 of the report was discussed at the DWG meeting in Hobart, Australia in May 2014 and is now available. Part 2 of the report will be released later this year.
Pillar 3 - Increased transparency in the reporting of financial data by MNEs
Work is underway to identify best practices in enabling public access to local statutory accounts (draft report Transparency in Reporting Financial Data by MNCs). The Task Force is also monitoring developments on ongoing government transparency initiatives and in particular the rules for implementing Section 1504 of the Dodd-Frank Act and proposals for revising the EU Transparency Directive.
Pillar 4 - Countering international tax evasion/avoidance and improving transparency and exchange of information by supporting the Global Forum on Transparency and Exchange of Information
This includes assisting developing countries to build capacity in the area of exchange of information (EOI) the most effective tool to combat international tax avoidance and evasion, and to prepare them for the Global Forum’s peer review of their legal and administrative framework for transparency and EOI.
Pilot projects in Kenya and Ghana are helping these countries to develop an EOI network with relevant partners including jurisdictions which are the possible destination of the proceeds of tax evasion. The Task Force has also assisted ATAF to develop a Practical Guide on Exchange of information for developing countries (also available French and Portuguese).
Plenary Meetings of the Task Force on Tax and Development:
The Fourth Meeting of the Task Force on Tax and Development took place in Seoul on 30-31 October 2013. Click here for more information on this meeting and the meeting documents.
The Third Meeting of the Task Force on Tax and Development took place in Cape Town on 9-10 May 2012.
The Second Meeting of the Task Force on Tax and Development took place in Paris on 11-12 April 2011.
The First Meeting of the Task Force on Tax and Development took place in Paris on 11 May 2010.
The Task Force has now gained further recognition by the G20 as a forum which brings together all the major players in this field and as such contributed to the international organisations' report to the G20 in 2011.
For more information please contact: TaxandDevelopment@oecd.org
Governance and development
Task Force Sub Group on Transparency in Financial Reporting, March 2013
Task Force Sub Group on Transfer Pricing, March 2013