Comments on the working paper prepared by the facilitator to the preparatory committee for financing for development, at its third substantive session:
Mobilizing domestic financial resources for development

In the working paper, under the section Heading I: Mobilising domestic financial resources for development, the Facilitator has raised a number of key questions, inter alia:

• How to enhance international cooperation to fight corruption, eliminate money laundering and illegal transactions and repatriate illegally transferred funds?
  
• How can international cooperation support national efforts to put in place an efficient and equitable tax system?
  
• How can the international community support national efforts to foster the development of more inclusive financial services and ensure access by all, notably women and the poor?

These questions reflect the submissions of several governments, notably the Government of the Islamic Republic of Iran on behalf of the G77 and China and the Government of Sweden on behalf of the European Union.

Several Governments have also called for the final outcome document of the FfD Conference to be action-oriented and innovative in its approach.

The International Council on Social Welfare (ICSW) would like to reiterate the recommendations it made in the FfD Hearings with Civil Society Representatives, in November 2000, and in the Second FfD PrepCom of February 2001. Basic deficiencies in tax administration, compounded by the effects of globalisation, stand in the way of mobilising significant levels of domestic resources. The ICSW package of proposals to address these deficiencies includes the following Priorities For Action accompanied by specific Action-oriented Implementation Strategies.

Priorities for Action

1. Stronger international obligations for provision of information to, and between, tax authorities
   
   
2. Improved international technical and financial assistance for tax authorities in developing countries
   
   
3. Strengthening of international taxation standards on matters such as tax bases, minimum tax rates, transfer pricing etc together with coordinated action to secure compliance
   
   
4. International adoption of refundable withholding taxes on cross-border payments, especially in relation to interest, dividends and royalties
   
   
5. International coordination of taxes on multinational companies, including application of taxes by countries in which their goods or services are consumed
   
   
6. International coordination of taxes on currency transactions, preferably through a low standard rate and a higher rate in times of volatility
   
   
7. Removal of special tax exemptions on e-commerce
   
   
8. Development of an International Convention for repatriation of misappropriated public funds
   
   
9. Substantial and firm commitments to provide improved official development assistance and debt cancellation

Implementation Strategies

1. Development of expert technical and negotiating units by developing countries on a regional basis
   
   
2. Strengthening of ECOSOC's involvement in international coordination of tax reform, including through its existing expert taxation committee and through convening a major global conference on Taxation and Development
   
   
3. Development under the auspices of ECOSOC of an International Code of Corporate Conduct which includes requirements in relation to tax compliance
   
   
4. Development of an International Tax Forum under UN auspices, in order to conduct research, exchange information, identify problems, develop standards, monitor implementation, arbitrate disputes and coordinate action to promote compliance.