Parliamentary Assembly of the Council of Europe (PACE) Debate on the OECD report, 20 April 2021

 

Remarks by Angel Gurría,

Secretary-General, OECD

Paris, 20 April 2021

Distinguished Members of Parliament,

I am pleased to join you for this debate on the OECD’s activities.

I would like to thank Georges Katrougalos, a good friend of the OECD and author of this year’s report, and to the rapporteur, Ms. Selin SAYEK BÖKE, for their work and today’s presentation. But I also want to pay tribute to the Parliamentary Assembly of the Council of Europe and to this fruitful partnership, as this is the last time I will participate in this exercise as OECD Secretary-General. It has been a true pleasure.

Let me start with the global economic outlook. Global GDP fell by 3.5% during 2020, and we project 5.6% growth this year. World output should return to pre-crisis levels by mid-2021. This projection crucially depends on the race between the vaccination rate and the spread of emerging variants of the virus.

However, this recovery will be uneven across the globe and many countries may need more time to return to pre-crisis levels. Governments must continue to provide fiscal support. They must actively use policy instruments to restore our economies, and promote inclusive, resilient and sustainable growth.

Let me discuss three ways we can build forward better beyond GDP.

First, the recovery is an opportunity to make growth greener. Recent commitments by many countries to achieve carbon neutrality, or “net zero” emissions by 2050 are encouraging. We need a big fat tax on carbon! Around 60% of energy-related CO2 emissions from advanced and emerging economies are entirely unpriced and only around 17% of emissions are priced at or above the EUR 30 per tonne of the CO2. We will soon launch a new International Programme for Action on Climate (IPAC), led by France, to support countries to implement the goals of the Paris Agreement.

Second, the OECD can make the recovery more inclusive by solving the fiscal challenges from the digitalisation of the economy. We are at a critical juncture in the negotiations among the 139 member countries and jurisdictions of the Inclusive Framework on BEPS on how to address digitalisation’s tax challenges and modernise the international tax system.

The United States’ recent announcement of its major proposals has given the negotiations a renewed boost and may well unlock some of the sticking points. We greatly welcome the constructive engagement by the US; these recent moves signal a real chance of reaching a political agreement by mid-2021, as mandated by the G20. And this will allow important progress in our efforts to build a fairer and more transparent globalisation.

And third, the OECD will continue to tackle international tax evasion and avoidance. From our tax transparency efforts, EUR 107 billion of additional revenues in tax, interest and penalties were identified over the past decade. Bank deposits in international financial centres fell by 410 billion dollars. Information on 36,000 tax rulings were shared between jurisdictions. In 2019, nearly 100 jurisdictions exchanged information automatically on 84 million financial accounts, involving total assets of around EUR 10 trillion.

The relationship between the OECD and the Council of Europe on tax transparency issues has flourished, namely through the development of the Multilateral Convention on Mutual Administrative Assistance in Tax Matters, or the “MAC”. Today, the MAC is the world’s most powerful exchange of information treaty, with over 140 jurisdictions participating.

As my tenure as Secretary-General comes to an end, I want to reiterate that without this instrument, we would not have reached such great success on tax transparency. And we might not have been able to advance to the cusp of the global agreement we seek now. From the first days of our tax work, the Council of Europe has kept the faith with the OECD, and we have done great things together. That, my friends, is multilateral co-operation made real – better policies, for better lives.

Dear Members of this brilliant Parliamentary Assembly,

The COVID-19 pandemic has brought so much pain, hardship and uncertainty, but it has also brought a unique opportunity to build forward better, more sustainably and more inclusively. Our new Going for Growth 2021 report, which I launched one week ago, provides first-hand, country-specific OECD reform advice on how to do just that.

You can count on the OECD to continue working with you, and for you, to keep up the fight and shape a post-COVID world that is more inclusive, fairer and greener. I look forward to your comments and questions.

Thank you.

 

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