EU rejects calls for UN tax body to improve the global financial system

Apr 22, 2015

It said that the OECD is better suited to stop illicit financial flows.

Developing countries have called for an intergovernmental tax body under the United Nations to improve the global financial system and stop illicit financial flows.

But according to the Guardian, the European Union has rejected this proposal last week during negotiations in the UN’s financing for development (FfD) process. It argued that such a body would be unnecessary “institutional proliferation”.

Developed countries insisted that the Organisation for Economic Co-operation and Development (OECD) should be the centre of global tax negotiations.

However, experts from the European Network on Debt and Development (Eurodad) quoted by the Guardian said this "would exclude more than 100 developing countries from negotiations, while countries such as Luxembourg and Switzerland - a key part of the problem - get to be in the room".

The UN’s financing for development (FfD) process focuses on systemic issues such as illicit financial flows, sovereign debt crisis, private financial flows, trade, investment and global governance in a bid to contribute to the eradication of poverty and to financing sustainable development.

The report of the high level panel on illicit financial flows from Africa concluded that they "range from at least $30 billion to $60 billion a year”, making Africa “a net creditor to the world rather than a net debtor, as is often assumed”. In the EU, the estimated loss through tax dodging is €1 trillion per year.ADNFCR-2976-ID-801784526-ADNFCR