The Tax Justice Network has just published a report that starts from the assertion that the OECD and the G20 have been engaged in a ‘marketing campaign’ to ‘discredit and discourage’ the participation of developing countries in a new system of automatic information exchange for tax purposes being established by the OECD and the G20.[1]

The authors cite what appears to be a strong piece of evidence, from the mouth of Pascal Saint-Amans, who heads the OECD’s tax activities: ‘Most (developing countries) are not yet ready and most of them don’t want (automatic information exchange)’ (pp. 1-2). The report goes on to present survey evidence that appears to support the claim that developing countries are very eager to participate in automatic information exchange.

Yet another case of the poor countries of the world being excluded and disadvantaged through a rich country club? Yet another case of the global tax justice campaigners coming to the aid of the poor countries? Not this time.


What is automatic information exchange for tax purposes?

‘Automatic information exchange’ sounds technical and tedious.[2] It is however very important in the battle against tax evasion by transnational corporations and very wealthy people. Automatic information exchange means that, in principle, the tax authorities of any participating country will have automatic access to any information held by the tax authorities of any other participating country relating to any company or potential taxpayer in which they might have an interest. Once up and running, automatic information exchange will be a great improvement on the more prevalent system of information exchange on request, which requires tax authorities to explain to each other, and on each occasion, exactly what kind of information they need on specific individuals or companies. In tax investigations, as in crime enquiries, a certain amount of base information is generally required before you know exactly what to look for. Tax authorities often do not have enough information on suspected cases of tax evasion to frame a specific information request to another tax authority.

Making a reality of global automatic information exchange

There has been a great deal of movement over the last year in agreeing the basis for a global system of automatic information exchange for tax purposes. Considerable progress is being made in creating a functioning system, which will initially include only the richer economies. How and when most developing countries should apply or be admitted? There is a range of factors to be taken into account. Some of the most accessible explanations of how these systems might work are to be found in the publications of the Tax Justice Network and other tax campaigning organisations.[3]

But to understand what is currently possible, we first need to grasp the broad political picture:


– The vast bulk of international economic transactions are among high income countries. That is also where most tax avoidance and evasion activities are to be found. And it is the tax authorities of the richer countries that have the most experience in challenging transnational tax avoidance, and are best equipped to do so. It is practically inevitable that any effective global system of automatic information exchange should begin with the rich countries and be organised primarily through the OECD. For the purposes of the current international tax reform discussions, the OECD has in effect temporarily recruited all members of the G20, and thus includes most of the leading non-OECD emerging powers – Argentina, Brazil, China, India, Indonesia, Russia, Saudi Arabia and South Africa.

– The OECD/G20 are operating under tight self-imposed time limits to make real progress in tax reform. It is therefore inevitable that most developing countries – which are not so well organised and are also highly diverse in their tax affairs and concerns – would not be central to the decision making over automatic information exchange. Efforts were made to consult them, but that does not amount to effective participation in decision-making.[4]

– Does this mean, as the international tax justice campaigners have consistently argued, that developing countries are being disadvantaged by their exclusion from an institution that they need and want to join as soon as possible? Or, as tax administrators in low income countries frequently claim, are low income countries being disadvantaged because they will soon be dragged into joining a system created by richer and more influential countries that do not address the particular needs and concerns of most developing countries?

– These sound like polarised positions. They are actually quite complementary. There is in practice a high degree of consensus among the specialists involved. Whether affiliated to tax justice campaigns, to the OECD, or elsewhere, the specialists tend to agree that: it is in the long run in the interests of everyone except tax evaders that low income countries join in automatic information exchange; that most low income countries are currently not ready to join in because they do not have the software systems and skilled staff needed; that investments should be made to meet those gaps, with richer countries sharing the burden; and that, as far as possible, various interim arrangements should be made to allow ‘unready’ countries to share in at least some of the benefits of automatic information exchange. For example, some low income countries, especially the smaller ones, might be allowed to receive information from the system before they are in a position to contribute to it.

There will be disagreements about the detail of how to implement this broad consensus. However, there is great scope for compromise and for different developing countries to integrate into global automatic information exchange at different rates. These are not ‘do or die’ policy issues that involve fundamental conflicts of ideology or interests. It is not clear why the Tax Justice Network has published this report that gives a very different impression, and opens with what will be widely seen as a personal attack on the Director of the OECD’s Centre for Tax Policy and Administration, Pascal Saint-Amans.


The position of the report’s authors might be partially retrieved if they had produced reliable evidence to support their claim that developing countries strongly want to participate in the global automatic information exchange now. Their evidence is however almost worthless (pp.30-31). They sent a questionnaire to tax authorities or other relevant people in 37 countries. They received eight replies. Three of those eight replies were from people who explicitly stated that they were replying in their personal capacities, and not representing their governments. These responses were however considered ‘valid proxies for the official view.’ The questionnaire included a range of questions that might be used to assess broad attitudes toward national participation in automatic information exchange. But there were no questions about the potential cost, relative priority, or potential timing of participation. In other words, the most that could be inferred is that the respondents – like almost everyone in the tax business – broadly thought automatic information exchange to be a good thing in the abstract. And was this the voice of low income countries whose tax administrations are especially likely to be challenged by rapid incorporation into the automatic information exchange system? Hardly. The eight respondents were from Argentina, China, Costa Rica, Honduras, Liberia, Morocco, Pakistan and Uganda. Of these, only Uganda is currently classified as Low Income; the other seven are Middle Income.

All is fair….?

It is said that all is fair in love and war. I take the same attitude to tax justice campaigning. At first sight, it does seem a little unfair that some companies – Amazon, Barclays, Google, SAB Miller – are singled out as campaigning targets by Christian Aid, Oxfam or UK Uncut, while other companies that more actively avoid taxes are left unscathed. But that is one of the prices we pay for democracy. Campaigns targeted on companies that are already in the public eye are one of the most effective ways of bringing corporate tax avoidance and evasion to the notice of ordinary voters. If the voters are not mobilised, the secretive political, legislative and administrative processes that permit large scale corporate tax avoidance and evasion would rarely be challenged.

I am prepared to defend the tax justice campaigners when they play rough – provided that toughness is a sensible tactic likely to advance the tax justice cause.


The campaigners’ record is mostly very good. Without them, a bunch of powerful international organisations – the G8 and the G20, the OECD, the IMF, the European Union – would not be committed, as they currently are, to design and implement some rather progressive reforms to international corporate tax. However, I hesitate when I see the leading tax justice campaigning organisation publishing a report that artificially polarises opinion, stridently uses ‘evidence’ that obviously has no value, and makes a personal attack on one of the leading officials responsible for the current international reforms. Credibility is a valuable resource, not to be cast away lightly.

[3] Automatic for the People. Automatic information exchange, tax justice and developing countries. Christian Aid, 2014.

and Andres Knobel, Markus Meinzer, Automatic Exchange of Information: An Opportunity for Developing Countries to Tackle Tax Evasion and Corruption. Tax Justice Network, June, 2014.

[4] Mick Moore, Will Changes to the International Tax System Benefit Low-Income Countries? IDS Rapid Response Briefing 6, January 2014.



Mick Moore

Mick Moore is a Professorial Fellow at the Institute of Development Studies and the founding CEO of the International Centre for Tax and Development. He is a political economist whose broad research interests are in the domestic and international dimensions of good and bad governance in poor countries, focusing specifically on taxation in Asia and Africa.