During a keynote address to the high-level conference “Challenges in Designing Competitive Tax Systems" co-organised by the OECD and the French Ministry of Finance, Secretary-General Angel Gurría said countries must boost international co-operation as they redesign their tax systems to meet future revenue needs and economic competitiveness challenges.
As he addressed top tax officials from both OECD and G20 countries, Mr. Gurría encouraged governments to launch a new dialogue on the best means of achieving a competitive tax environment. “When governments act together, they are stronger than when they act separately,” Mr Gurría said. “If we want to maintain sovereignty in the design of our tax systems, then we need to enhance our international co-operation.”
The conference brought together more than 150 top tax officials from 42 countries, and featured wide-ranging discussion on the main trends driving tax reform over the past 50 years in OECD and non-OECD countries. Participants also assessed the common pressures impacting tax policy and administration and what can be done to ensure competitive tax systems in the future.
Potential areas for future OECD work highlighted in Mr Gurría’s address include:
Development of better analytical tools to measure and more precisely define the competiveness of tax systems.
Creation of a common analytical framework to assess the cost of investment tax incentives, coupled with regular publication by governments of how much these incentives cost, and evaluation of whether they are achieving their stated goals.
New joint efforts to reduce compliance costs.
Better analysis of how globalisation and economic integration impact tax systems, to avoid disincentives for cross-border trade and investment; but also to limit the scope for tax avoidance via multiple deductions, the creation of untaxed income and other unintended consequences of international tax arbitrage.
Renewed international dialogue to ensure that existing international arrangements, including the OECD Model Tax Convention and Transfer Pricing Guidelines, meet future needs.