News Release

On Eve of Obama Visit, Rich Nations Block Tax Reform at Ethiopia UN Meeting

Obama is scheduled to go to Kenya today. CNN reports he will “address the sixth Global Entrepreneurship Summit, and the first to be held in sub-Saharan Africa.” He will then go to Addis Ababa, becoming the first U.S. president to visit Ethiopia.

The third international Financing for Development Conference was just held in Addis Ababa. There the developing countries and non-governmental organizations tried to reform the global tax rules, to end tax dodging by multinational corporations which is estimated to cost developing countries hundreds of billions of dollars every year. But the U.S. government was the leading blocker of the proposal. Groups advocating reform argue that talking about the benefits of entrepreneurship while denying demands that rich countries take responsibility for their tax systems that deprive African countries of great sums of money is more than a misdiagnosis, it’s a purposeful misdirection by shifting responsibility onto the victims.

The Guardian reported in “Glee, relief and regret: Addis Ababa outcome receive mixed reception” that the conference will be “remembered for a standoff over calls from the G77 [Group of 77 developing countries, which now numbers over 100] to upgrade the UN expert committee on tax into a new UN agency giving all countries a seat at the table. …Tax was always going to be the biggest bone of contention in Addis … Rich nations, particularly the U.S., UK and Japan, were accused of lobbying hard to block the proposed agency.”

ALDO CALIARI, acaliari at coc.org
Caliari is with the Center of Concern in Washington, D.C., which criticized the conclusion of the conference as an “inaction agenda.” He spoke at a news conference at the end of meeting in Ethiopia. See video.

LUCKYSTAR MIYANDAZI, Luckystar.Miyandazi at actionaid.org, @Lustarnde
Miyandazi is Tax Power Campaign Africa Coordinator for ActionAid International, based in Kenya. She said today: “What came out of the third international Financing for Development Conference in Addis Ababa, Ethiopia, was almost no change at all to how the international tax system currently works! Paragraph 29 on tax was the major contentious point. Arguing for the establishment of a UN tax body was the G77 and China group of 134 developing countries. It was a huge missed opportunity, an appalling failure and a great blow to the fight against poverty and injustice especially in developing countries. Blocking the establishment of a UN intergovernmental tax body by the U.S., UK and Japan has confirmed that the world will be stuck with a tax system that continues to work only in the interests of rich countries, rich individuals, and rich companies for the foreseeable future. The poorest and most marginalized people, in particular women, will continue to suffer and inequality will continue to grow.”

ActionAid noted in a statement during the recent conference: “Developing countries lose an estimated $212 billion every year to tax dodging by multinational companies. This is lost revenue that is desperately needed for the provision of public services, such as education and health care, which are essential for the eradication of poverty. Harmful tax practices like this are, in large part, due to the decision-making structure of the global tax system.”