Jamaica FinMin Clarke chairs OECD roundtable on taxation
Published:Wednesday | November 10, 2021 | 10:53 AM
Minister of Finance Dr Nigel Clarke has been tapped by the leaders of 38 of the world’s richest countries that comprise the Organisation for Economic Co-operation and Development, OECD, to chair a virtual ministerial roundtable discussion on 'Developing Countries and International Taxation'.
Concerned that multinational companies are not paying their fair share of taxes and are utilising structures such as international business companies in low tax jurisdictions to avoid taxes, the OECD and the more elite club of rich nations, the Group of 7, have for years been spearheading initiatives to reform the global corporate tax system particularly as it relates to multinationals.
Earlier this year, the G7 proposed a minimum global tax to be applied at the rate of 15 per cent on all corporations that operate across multiple jurisdictions as a way of reducing tax avoidance. The OECD and G7 countries have been building a broader coalition of nations to present a united global front as they hammer out an agreement on a new tax to be paid to countries where companies make their money, rather than where they are headquartered, as was previously the case. The collaboration multi-nation collaboration has included the G20 as well as several developing countries.
A statement from the finance ministry late Tuesday said the roundtable was being convened at a time when the global tax landscape is evolving quickly, particularly as developing countries are experiencing constrained fiscal space due to the global pandemic and there is therefore an urgency to ensure that developing countries benefit from new opportunities including in international tax matters.
“Jamaica, as a member of the 141 strong OECD/G20 Inclusive Framework, joined with 136 fellow members to support the historic agreement to implement a fairer global tax system allowing for allocation of the taxing rights to market jurisdictions on the profits of multinationals across the globe, as well as ensuring that multinationals pay a minimum of 15 percent tax on profits earned from their global activity,” the ministry said.
While the government had not commented before now on the G7 proposal as the finance ministry was said to have awaited details of the plan, Clarke noted in his opening budget speech in Parliament in March this year that the government had tasked a working group looking at venture capital, to review ways of attracting essentially Jamaican companies, incorporated in some other Caribbean jurisdictions for “tax efficiency” purposes, to relocate their headquarters to Jamaica.
The finance minister also said he sees the roundtable "as an opportunity to generate the necessary political attention so that we can benefit fully from international tax discussions”.
The ministerial roundtable is said to have a threefold objective: to set a high-level political agenda on the needs and priorities of developing countries in international taxation to feed into and inform the ongoing international tax dialogue; provide feedback on the main findings and recommendations in the OECD report on developing countries’ participation in the Inclusive Framework; and reflect on how the inclusive framework could evolve to further support domestic resource mobilisation in developing countries in the COVID-19 era and beyond.