For Accuracy, Integrity, & Transparency: Liberia Signs Tax Convention Protocol
As part of efforts to control financial inflows internationally, the Liberian Government has signed the Convention on Mutual Administrative Assistance in Tax Matters.
As amended by the Organization for Economic Corporation and Development (OECD), the Convention provides a multilateral basis for a wide variety of administrative assistance including information exchange on request, automatic exchange of information, simultaneous tax examinations, assistance in tax collection and service of documents. It also provides governments with a valuable tool for fighting offshore tax evasion and avoidance.
The Convention is the most comprehensive multilateral instrument available for tax co-operation and exchange of information. It helps counter cross-border tax evasion and ensures compliance with national tax laws while respecting the rights of taxpayers.
Liberia’s Finance and Development Planning Minister Samuel D. Tweah said the signing of the convention by Liberia confirms the country’s robust commitment to international cooperation on a variety of fronts, noting that the signing was a further demonstration of Liberia key role in transparency issues, since Liberia is already a member of the Global Forum on Transparency and Exchange of Information for Tax Purposes.
Minister Tweah who signed the Convention on behalf of his country, further said that by Liberia signing of the Convention underscores the heightened importance the Government attaches to the accuracy, integrity, and transparency of revenue accruing to the people of Liberia. He said Liberia was delighted to join other nations in the accelerated push against tax evasion and avoidance, which are dealing a crippling blow to the revenue generation in developing countries, adding that the marginal impact of tax evasion and avoidance is largest in developing or low-income countries.
The Liberian Finance Minister said his country looks to leveraging the Convention as part of its Domestic Resource Mobilization Strategy, which is the final stages of development, noting that it provides the road-map and the framework for transforming Liberia’s tax administration over the next five years.
“Because domestic resource mobilization is critical to Liberia’s debt sustainability in light of the country’s ambitious Pro-Poor Development Agenda, we will take great steps to significantly ramp-up the effectiveness of the country’s tax administration, while plugging leakages and shoring up capacity for tax assessment” he revealed.
Minister Tweah said the Government of Liberia believes the Convention can be useful not only in shedding transparency or exchanging information on critical tax matters, but also an instrument in deepening bilateral and multilateral partnerships on the effectiveness and efficiency of tax administration.
OECD Deputy Secretary-General, Masamichi Kono congratulated Liberia for signing the Convention which is a multilateral Convention on Mutual Administrative Assistance in Tax Matters, thus it is a crucial milestone towards putting the Convention into force and hailed Liberia on joining the most comprehensive multilateral instrument available for all forms of cross-border tax co-operation, including exchange of information on request and the automatic exchange of information pursuant to the Common Reporting Standard.
Mr.Kono said the Convention is a key tool in the global efforts to tackle tax evasion and avoidance, and said Liberia has joined 121 other jurisdictions who currently participate in the Convention.
He said the OECD was pleased with the interest Liberia is showing in the automatic exchange of financial account information pursuant to the OECD/G20 Common Reporting Standard.
“We are pleased that you are a long-standing member of the Global Forum on Transparency and Exchange of Information for Tax Purposes, having joined back in 2009, showing your full commitment to the international tax transparency agenda. The Phase 1 peer review report of Liberia with regard the implementation of the exchange of information on request standard was adopted in 2012 and we look forward to working with you this year for the second Phase of the Exchange of Information on Request peer review”. Kono added
He said by joining the Inclusive Framework on Base Erosion Profit Shifting,(BEPS) Liberia, together with 115 other countries, Liberia has shown its determination in addressing the BEPS. He said currently working with the Liberian authorities to ensure the implementation of the four BEPS minimum standards in relation to harmful tax practices, abuse of tax treaties, Country-by-Country reporting for the activities of Multinational Enterprises and dispute resolution mechanisms. These measures, once implemented, will allow Liberia to better protect its tax base.
Kono pledged the OECD support and cooperation, as the country moves to ensure its various programs are implemented.