New Global Taxman to Wage War on Informal Economy…”A tax ID for each and every global citizen?”
By Don Quijones
WolfStreet.com
July 12, 2015
This coming week, political representatives of many of the world’s developing countries will gather in Addis Abbada, Ethiopia, for the International Conference on Financing for Development. Two issues seem set to dominate proceedings: tax evasion and the informal economy.
As I warned in the article “Beware, the Borderless Taxman Cometh,” these two intertwined issues are becoming increasingly important to today’s cash-strapped governments. Recent years have seen ever closer cooperation between national tax authorities, with the US and Europe leading the way.
As part of this effort the delegates assembled in Abbis Abada next week are expected to discuss ways of coordinating their efforts to combat tax evasion in Africa and beyond. Euractiv:
Tax evasion costs developing countries around €100 billion each year. This leads to considerable budget shortfalls in countries with already low tax revenues.
In the developing world, tax revenue represents on average between 10% and 20% of GDP, while the average in OECD countries is between 30% and 40%, according to a study on the mobilization of tax revenues in developing countries carried out by the European Parliament.
To boost their tax raising capabilities, developing countries are being pressured to give their backing (and a sizable chunk of their national sovereignty) to an international body such as the UN or the OECD. For France, the Paris-based OECD is the obvious choice. “We will make faster progress in an OECD forum with the participation of developing countries than we would at the UN,” said Annick Girardin, the French Minister of State for Development.
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