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New report: Tax Inspectors Without Borders initiative involved ‘serious conflicts of interest’ and pilot projects were driven by rich country donors

A new report on the much-hyped Tax Inspectors without Borders (TIWB) initiative presents clear indications that the pilot phase involved serious conflicts of interest between donors and developing countries, and that early projects were launched in countries that hadn’t asked for that kind of intervention.

This is of great concern because TIWB, which is now managed by the OECD and UNDP, takes tax assistance to a new level, where foreign experts get direct access to the tax administrations of developing countries.

The report also publishes internal OECD documents that reveal for the first time how some developing countries that received tax experts were not leading the projects as they are supposed to, and that there were serious problems in the cooperation between donors and developing countries.

Tove Maria Ryding, one of the authors together with Hernán Cortés Saenz, and Tax Justice Coordinator at the European Network on Debt and Development (Eurodad), said: “
There is little publicly available information about Tax Inspectors Without Borders, but the little information that we have found – particularly within internal OECD documents that have not been published before - is very worrying.”

The internal documents cover three pilot projects held between the UK and Rwanda; the Netherlands and Ghana; and France and Senegal, respectively.

They reveal that:

· Neither Rwanda, Ghana nor Senegal were leading the processes when the TIWB pilot projects in their countries were initiated, even though the OECD guidelines and international principles say this should be the case.

· In the case of the UK and Rwanda, the document says the UK was “in the lead during the whole process” and that Rwanda had a “low level of comprehension’ of the TIWB concept.

· The Netherlands was “in the lead”, while “Ghana had a passive role in the process”.

· There was “no involvement” of Senegal in the drafting of terms of reference for the France-Senegal project.

In the case of the UK and Rwanda, PricewaterhouseCoopers (PWC), a company which provides advice to multinational corporations on their tax planning, played a central management role in the pilot project. Furthermore, in all three cases, the donor countries have substantial corporate interests in the developing country they were sending their experts to.

Ryding said:
“Tax is a highly political issue, and governments are not always playing on the same team. On the one hand, our governments are engaging in what they call ‘tax competition’, and many European countries have strong corporate interests in developing countries. On the other hand, Tax Inspectors Without Borders means that European countries are now sending people into the very heart of the tax administrations of developing countries. This presents a high risk of conflicts of interest.”

The report, which is titled In Whose Interest? makes several recommendations on how to ensure that developing countries are really in control, and conflicts of interest are avoided. It also recommends that deployment of foreign experts into developing country administrations should not be a default option, but several options should be open to recipient governments.

ENDS

Media contact: Julia Ravenscroft, Communications Manager at Eurodad, on jravenscroft@eurodad.org or +32 2 893 0854.


Notes to editors:

· The Tax Inspectors Without Borders (TIWB) initiative was launched as a pilot project in 2013 by the OECD and was officially launched at the Financing for Development (FfD) summit in Addis Ababa in 2015 as a partnership between OECD and the UN Development Programme (UNDP). It is now jointly managed by both organisations.

· Eurodad (the European Network on Debt and Development) is a network of 47 civil society organisations (CSOs) from 20 European countries. Eurodad works for transformative yet specific changes to global and European policies, institutions, rules and structures to ensure a democratically controlled, environmentally sustainable financial and economic system that works to eradicate poverty and ensure human rights for all.