UN panel calls for "global response" to tackle corporate tax abuse

Governments around the world should tackle cross-border financial corruption and rampant tax abuse to obtain the resources necessary to eradicate poverty, address climate change and reduce inequalities exacerbated by the COVID-19 pandemic, a high-level United Nations panel recommended on Thursday.

The International Financial Accountability, Transparency and Integrity panel published a report with 14 recommendations aimed at updating and enhancing the international financial system. Among its suggestions to governments: set a global minimum tax of 20% to 30% on corporate profits; establish global guidelines and regulations for accountants, attorneys and financial professionals; publish information about the profits, location of assets and owners of corporations; and create laws to pursue financial crimes and corruption cases across borders. The panel also calls for international standards on protecting journalists, advocates, and whistleblowers.

“Every year, trillions of dollars flow out of developing countries due to the activities of criminals, corrupt politicians and officials, and tax evaders,” said Munir Akram, president of the UN Economic and Social Council and permanent representative of Pakistan in the UN. “Turning a blind eye to such illicit [financial] flows, especially during a time of economic recession triggered by the COVID-19 pandemic, is nothing short of criminal.”

The panel calls on countries to sign a global pact to implement the recommendations, track and stop the illicit movement of money across jurisdictions, and ensure that the recovered funds are used for sustainable development.

“Given the magnitude of resources that could be unlocked with financial integrity, the Global Pact could have a substantial impact on the well-being of people and planet in developing and developed countries,” the report states. “It would also constitute a major contribution to improving multilateral and national governance.”

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