Mr. Sorley McCaughey:

I will move straight on to the issue of domestic resource mobilisation as a central outcome for the financing for development agenda. Mobilising domestic resources is critical because tax represents the most sustainable, dependable and predictable source of income for developing countries. It is the income that is most likely to lead to sustainable development and it is the expansion of the public purse that will underpin a state's ability to deliver on its human rights obligations. Indeed, there is increasing recognition that tax avoidance schemes that deprive states of their ability to collect revenue represent a human rights abuse. Any proposals as part of the financing for development agenda to strengthen domestic resource mobilisation must be focused on supporting tax systems that generate sufficient revenue, address inequality and have a redistributive effect. They also need to be fully accountable to governance institutions that are representative of the needs of people living in poverty. We know, and this committee is familiar with, the obstacles in place that prevent developing countries from generating sufficient revenue. The most recent figures from Thabo Mbeki of the High Level Panel on Illicit Financial Flows from Africa puts the amount at €50 billion on an annual basis. The IMF argues that the impact of tax avoidance on developing countries amounts to as much as €212 billion every year. These numbers are huge and we need an increase in financial transparency to address this issue. We need to change the rules of the global tax system and we need more inclusive and democratic institutional frameworks under which such changes would happen. We also need to acknowledge that while a lot of changes in the international taxation system are happening under the OECD's Base Erosion and Profit Shifting, BEPS process, this process is not representative of the needs of developing countries and cannot address their needs and concerns.

There are specific results that we would like to see coming out of the financing for development process that address the issues of transparency and the rules of democratic institutions. One is the introduction of a country-by-country reporting standard for multinationals so that we know exactly what they are doing in every country in which they operate. We need to change the rules of the global tax system; we need to change it from the current OECD system to something that is more representative of the needs of developing countries. We also need to establish a UN-based tax body. At the moment the international taxation system is being governed or guided by the OECD and is not representative of the particular needs of developing countries. We would like a concrete outcome from the financing for development process to be the establishment of a UN body to look after international tax matters.

I will leave it at that for now.