Embargoed for June 2, 2015 at 12:01am EST
Contact: Blair Fitzgibbon, 202-503-6141
Top Economists & Global Finance Ministers Launch
Declaration Calling for International Corporate Tax Reform
José Antonio Ocampo, Joseph Stiglitz, Magdalena Sepúlveda,
Eva Joly of ICRICT Independent Commission Urge World
Leaders to Fix Broken System
ICRICT Panel to Discuss Declaration at Trento Festival of Economics
on June 2 at 5pm CET
View Declaration here: http://www.icrict.org/declaration/
Trento, IT – Today, the Independent Commission for the Reform of International Corporate
Taxation (ICRICT) launched a global declaration calling for an overhaul of the outdated
international corporate tax system and demanding broad, sweeping changes in the current rules
and governing institutions. The declaration will be discussed later today by a panel of ICRICT
commissioners at the Trento Festival of Economics in Trento, Italy beginning at 5pm CET.
“Multinational corporations act and therefore should be taxed as single and unified firms – It is
time for our leaders to be bold and recognize the legal fiction of the separate entity principle,”
said Joseph Stiglitz, professor and Nobel Prize winning economist. “During the transition,
leading developed nations should impose a global minimum corporate tax rate to stop the race to
the bottom.”
“This debate centers on equity: equity between good taxpayers and bad taxpayers, equity
between capital and labor, equity between the rich and those living in poverty, as well as equity
between countries, including between developed and developing countries,” said ICRICT chair
José Antonio Ocampo, former United Nations Under-Secretary General and former Minister of
Finance of Colombia. “International corporate tax reforms should be considered from a global
public interest perspective rather than national or corporate advantage.”
The declaration argues that the current system is obsolete and ineffective in preventing tax abuse
by multinational corporations and urges all world leaders to be bold in their reform or they risk
escalation of the already fierce public discontent over corporate tax scandals.
Some key points are:
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Tax abuse by multinational corporations increases the tax burden on other taxpayers,
violates the corporations’ civic obligations, robs developed and developing countries of
critical resources to fight poverty and fund public services, exacerbates income
inequality, and increases developing country reliance on foreign assistance.
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The current reform efforts of the G20/OECD Base Erosion and Profit Shifting initiative is
a step in the right direction but fundamentally inadequate because in this context the
decision-making power is not globally representative. The challenges of tax abuse
demand global tax solutions that cannot be created outside of an inclusive global tax body
with all nations at the table.
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The primary enabler of international corporate tax abuse is the separate entity principle—
a legal fiction that enables the flow of vast amounts of taxable income away from the
underlying business operations.
The declaration recommends that all countries:
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Tax multinationals as single firms with developed countries imposing a minimum
corporate income tax rate during the transition
Curb tax competition to prevent a race to the bottom
Increase public transparency of taxes paid by multinationals
Build inclusivity into international tax cooperation by establishing an intergovernmental
tax body within the United Nations and begin drafting a UN convention to combat
abusive tax practices
See full list of ICRICT commissioners here: http://www.icrict.org/the-commission/
About ICRICT
The Independent Commission for the Reform of International Corporate Taxation aims to
promote the international corporate tax reform debate through a wider and more inclusive
discussion of international tax rules than is possible through any other existing forum; to
consider reforms from a perspective of public interest rather than national advantage; and to seek
fair, effective and sustainable tax solutions for development. ICRICT has been established by a
broad coalition of civil society and labor organizations including Action Aid, Alliance
Sud, CCFD-Terre Solidaire, Christian Aid, the Council of Global Unions, the Global Alliance
for Tax Justice, Oxfam, Public Services International, Tax Justice Network and the World
Council of Churches. ICRICT is supported by Friedrich-Ebert-Stiftung.
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