Body for global tax reforms established

With corporate tax avoidance becoming a big issue across the world, a new body - the Independent Commission for the Reform of International Corporate Taxation (ICRICT) - has been established to propose tax reforms, keeping in view the larger public interest.

The commission holds the view that a just tax system is required to tackle the contentious issue of rising inequality - an issue that many countries, both developing and developed, are currently grappling with.

Tackling inequality, it says, would require that those with the means pay their fair share, proceeds from which could be used to provide basic social protections and quality public services to the poor.

Currently companies across the world, take advantage of tax havens and the offshore secrecy system to obtain low effective tax rates, thereby lowering their tax liability and out-compete national businesses.

Criticising this practice, the commission says, "Tax justice demands that global corporations pay their fair share of tax and that governments create rules to level the playing field between businesses - large and small."

This suggests that the commission is likely to look at existing tax loopholes that companies and individuals take advantage of to lower their tax liability.

Arguing for the need for a wider debate on tax reforms the commission argues in the current system, proposals to reform the tax system are debated in technical terms so that consultations involve mainly tax advisers of multinational corporations, who have vested interests in the current system. Thus it calls for seizing this unprecedented opportunity "to contribute to a wider public debate beyond the small group of technical experts who have so far dominated the discussions."