OECD tax chiefs vow to combat tax evasion |
Tax chiefs of advanced economies and representatives from international finance agencies vowed Friday to boost cooperative ties in tackling cross-border tax evasion.
"We are committed to using national, regional and multilateral initiatives to achieve better compliance with tax laws working within the existing framework of bilateral agreements," said a joint statement adopted by the tax agency chiefs of member states of the Organization for Economic Cooperation and Development (OECD) in Seoul.
The statement, dubbed the Seoul Declaration, was issued following the third OECD Forum on Tax Administration (FTA) in South Korea to discuss broader cooperation in curbing international tax evasion practices.
The statement identified four areas in which OECD tax authorities plan to focus on in dealing with tax avoidance schemes, including an initiative of an international study examining the role of tax-related institutions in relation to non-compliance, to be completed by 2007.
"The role of intermediaries (such as law firms) have been identified as something that we want to collectively look at," U.S. Internal Revenue Service Commissioner Mark Everson, who also served as the chair of the meeting, said at a press conference.
"The nature of the problems confronting tax administration is clear and there was a broad agreement that we wanted to step forward," Everson said.
The statement also said that the OECD will expand their corporate governance guidelines to give greater attention to the linkage between taxation and good governance.
The participants highlighted increasing tax manipulation schemes among companies of all sizes, noting that businesses are increasingly using more sophisticated cross-border schemes and investment structures involving the misuse of tax treaties.
"We agreed that addressing this multifaceted problem (of tax evasion) requires a response both at national and international levels," the statement said.
Meanwhile, the statement noted that "revenue bodies are under constant pressure to close the gap between the tax legally due and the tax actually collected."
"We strive to provide a tax administration system that is efficient, effective and provides high standards of service to taxpayers and other stakeholders." Jeon Goon-pyo, South Korea's National Tax Service commissioner, stressed that all member countries have unanimously agreed to express their concerns on growing international non-compliance.
"We have created an opportunity to arouse awareness among law firms and companies on the issue of tax-related malpractice," Jeon said.
The next OECD FTA is to convene in South Africa, late 2007 or early 2008, according to the statement.
It is the first time that the OECD tax forum, used to debate ways of improving the administration of tax services, was held in Asia.
The first OECD FTA meeting was convened in Seville, Spain, in January 2004. The second was held in Dublin, Ireland, in June the following year.
The forum was created to help countries collaborate in developing solutions to common taxation issues and chart future policy directions.
Seoul, Sept. 15 (Yonhap News)
