At its headquarters in Paris today, the Organisation for Economic Cooperation and Development (OECD) announced that its member countries have made major progress in efforts to eliminate harmful tax practices in their economies, modifying or abolishing more than 30 of the preferential tax regimes identified in 2000 as potentially harmful. *(See 2004 Report enclosed)*
Bill McCloskey, Chairman of the OECD’s Committee on Fiscal Affairs, hailed the positive results of the OECD’s work on harmful tax practices. The CFA is leading the drive against harmful tax practices. According to Mr. McCloskey,*”The work has resulted in real change. OECD countries have shown that they will take action to ensure that tax competition is fair.”*
The release today pointed out that OECD countries are continuing to work with non-OECD countries and jurisdictions that have made commitments to improve transparency and information exchange in tax matters. A total of 33 non-OECD countries and jurisdictions are Participating Partners in the OECD project on harmful tax practices. Five jurisdictions – Andorra, Liberia, Liechtenstein, the Marshall Islands, and Monaco – remain on the OECD’s List of Unco-operative Tax Havens. The OECD continues to seek their cooperation.
Mr. McCloskey emphasised the importance of fair and open competition on taxes for economic growth and prosperity. But he also stressed the importance of integrity of tax systems for democratic, open economies. *”We’re pleased with the progress that OECD countries have made in eliminating harmful tax practices as they relate to their preferential tax regimes and with the progress that we are making in establishing a co-operative working relationship with non-OECD countries and jurisdictions,”* he said.
The CFA Chairman further commented *”We will continue to promote the kind of tax competition that is based on high standards and leads to real and lasting benefits.”* Acknowledging that tax competition provides a useful discipline for governments, he nevertheless concluded that it should not lead to an abuse of tax measures since this would *”undercut the faith of honest taxpayers in their countries’ tax systems.”*