WASHINGTON The International Monetary Fund and the World Bank said on Tuesday they are joining forces with other international organizations to cooperate on tax issues and develop new tools and standards to halt tax base erosion and evasion.
The new grouping, which will also include the United Nations and the Organization for Economic Cooperation and Development (OECD), will focus particularly on building effective tax systems in developing economies, the partners said.
The effort was announced just weeks after the release of the so-called "Panama Papers" stirred outrage at the widespread use of tax haven countries and shell companies by wealthy global elites and corporations to hide assets and avoid paying taxes.
Global finance leaders at the IMF and World Bank spring meetings in Washington last week pledged to crack down on such tax evasion and base erosion, as well as to fight the exploitation of tax law mismatches and boost the sharing of tax information.
Finance ministers and central bank governors from the Group of 20 major economies last week also pledged to penalize countries that fail to cooperate in these efforts by implementing "defensive measures."
The decision by the four international organizations to create a new cooperation platform predates the release of the Panama Papers, but an IMF official said the group welcomed the heightened attention on tax issues that the controversy has stoked.
"This effort comes at a time of great momentum around international tax issues," the group said in a statement. "A major aim of the platform is to better frame technical advice to developing countries as they seek both more capacity support and greater influence in designing international rules."
Among the new group's goals is to develop appropriate policies for the taxation of multinational enterprises.
It aims to provide "toolkits" to help developing countries implement measures developed under a previous G20/OECD tax effort, known as the "Base Erosion and Profit Shifting" project.
The new group will hold physical meetings three times a year on the sidelines of other major international economic conferences, such as IMF and World Bank meetings.
The group also aims to help emerging market countries to develop policies for the "informal" sectors of their economies that operate in cash transactions outside the tax system. This effort will examine disincentives for small or micro businesses to enter into tax compliance and the trade-offs associated with broadening of the tax base.
(Reporting by David Lawder; editing by Chizu Nomiyama, G Crosse)
This story has not been edited by Firstpost staff and is generated by auto-feed.
Updated Date: Apr 20, 2016 00:00 AM