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Global tax transparency: How far can we go?
After leading the establishment of the Asia Initiative in 2022, Indonesia has an opportunity to again lead the region in crypto assets transparency by demonstrating its readiness to implement the Global Forum's expanded AEOI and new CARF standards.
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Tax matters: A tax officer provides consultancy services on Sept. 1, 2020, at the regional chapter (KKP) of the Taxation Directorate General (DJP) in the Cicadas area of West Java’s capital, Bandung. (Courtesy of/Bandung tax office)
Tax authorities and representatives of other tax-related institutions from 169 member countries of the Global Forum on Transparency and Exchange of Information for Tax Purposes, the international body focusing on the implementation of global transparency and exchange of information (EOI) standards, gathered at the 16th Plenary and Associated Meetings that ran from Nov. 27 to Dec. 1 in Lisbon. Among the topics they discussed were future steps toward achieving inclusive global tax transparency.
Inclusiveness is a very important dimension on the agenda for global tax transparency, because cross-border tax evasion will continue to occur as long as there are jurisdictions that remain outside the initiative.
According to Global Forum chair Gaël Perraud, the strong commitment of all members to international tax cooperation and information exchange since 2009 has resulted in significant progress in tax transparency, as well as a fairer tax system. In terms of tax revenue, the initiative has reportedly contributed additional global revenue of 126 billion euros (US$135.75 billion), of which 42 billion euros were collected by developing countries.
Along with these impressive achievements, the plenary meeting noted at least two other transparency-related developments toward inclusive tax transparency, each of which presents unique challenges for Global Forum members.
First, as mandated by the Group of 20, the Global Forum carries out an assessment of all members that have implemented EOI to ensure they have effectively implemented the mutually agreed EOI international standards.
These standards concern not only technical exchange standards such as the availability and quality of information, but also the capability to ensure the confidentiality and security of the data and information that are exchanged. This means that apart from ensuring the existence of legal instruments that give tax authorities the power to access, obtain, validate and exchange taxpayer information, a jurisdiction is also obliged to put in place instruments that ensure that the information exchanged is safe from the risk of misuse and leakage.
On the one hand, the capabilities of one country to another vary greatly in terms of human resources, economy, administrative efficiency and budget. On the other hand, however, the standards for exchanging information, including assessments carried out by the Global Forum, apply equally to all member countries.
