Financial Transparency Coalition

When the G20 signed the Convention on Mutual Administrative Assistance in Tax Matters in November 2011, amid great fanfare, the OECD, a club of wealthy countries, set out to promote it as the 'gold standard' of international tax cooperation. As is often the case (see here or here), the OECD's viewpoint is not quite the full story. While the Convention definitely provides various positive things -- most importantly a tacit assertion that automatic information exchange must be part of effective information exchange -- it also includes clear downsides.

The U.S. government frequently raises the issue of smuggling of bulk shipments of currency from the U.S. to Mexico as a major economic and security issue, one that demands greater effort by Mexican authorities to detect and deter. However, as a report released this week by Global Financial Integrity reveals, bulk cash smuggling is not the only form of illicit financial transfer taking place in staggering volumes across the U.S. - Mexico border.

Foreign bribery in Russiais a huge problem for the country’s economy. Investors are threatening to flee in droves in the face of ever increasing official depravity and the tightening of domestic laws on bribery abroad. Transparency International estimates that the total annual amount paid in bribes inRussia is worth $300 billion—equivalent to the GDP of Denmark. Global Financial Integrity estimates that the country lost an average $47 billion in illicit financial flows per year, a number which money transferred abroad stemming from tax evasion, corruption, and trade mispricing. Corruption has become an endemic characteristic of Russia’s public sector....

OECD countries acknowledge that taxes must play a role in the process of fiscal consolidation as they battle unprecedented budget deficits. New OECD data in the annual Revenue Statistics publication show that the majority of OECD governments have stabilised their tax to GDP, with the average ratio moving up slightly from 33.8% in 2009 to 33.9% (1) in 2010. That’s still down from 34.6% in 2008 and well below the most recent high point of 2007 when tax to GDP ratios averaged 35.2%.