Very good news to see the World Bank finally end the ideological nonsense that was its 'Doing Business' rankings. But the report the Bank has published on the reasons why is almost unbelievable - the extent of corruption in the organisation is just mindblowing.
The report is the result of an independent external review which the Bank commissioned (fair play) to look at the revelations about manipulation of the data and rankings in 2018 and 2020.…
The review points the finger variously at then-President Kim (or aides) & then-CEO Georgieva, who apparently pushed to change results for China- due to concerns over the implications of the country's view of its Doing Business score for the Bank's prospect for capital raising...
..and at Simeon Djankov, famously the only person to accuse my former CGD colleagues of being Communists, who seems to have made arbitrarily biased decisions about some countries while presiding over a toxic culture including fear and threats of retaliation.
The detail of how the sausage was made are harrowing for anyone who has ever worked honestly on an index: from trying to add Hong Kong or Macao's scores to China's, or taking the best score for any Chinese city for any variable, or suppressing Azeri improvements just because...
...or suppressing Jordanian improvements in order to give a better position to Saudi Arabia (who had a major contract with Bank to er improve their Doing Business score)...
The World Bank has published what appear to be claims of fairly blatant corruption by a whole range of senior staff, and effectively *of the organisation itself*. Its flagship product was manipulated in the service of raising money for itself.
There's only a passing mention of PwC's Paying Tax component - it was one of three indicators manipulated (that is, changed from the real data) in order to give China a better score.
Congratulations to @DavidMalpassWBG for the decision to publish this savage review and to eliminate the Doing Business rankings.

The bigger question is how, if it is even possible, the Bank can eliminate the apparent corruption of the institution that the review documents.

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More from @alexcobham

1 Jul
OK, the OECD statement is out - and *now* it's clear why so many countries have expressed reservations.…
Circulating beforehand were suggestions that in pillar 1, over 30% of the 'residual' profit could be apportioned to the sales jurisdiction.

No joy for lower-income countries (or anyone who favours a more ambitious move to curtail arm's length abuse): it's left at "20-30%".
Also floated, the idea that the review period could be reduced to less than 7 (SEVEN) years - just in case it turns out not to deliver anything for lower-income countries.

No joy: "review beginning 7 years after the agreement comes into force" - not even 7 years from now...
Read 26 tweets
12 May
Fascinating - both that ATAF is empowered to table its own proposal, following discussions with the US rather than the OECD, and also the detail: pointing towards a comprehensive apportionment of global profits of large multinationals...
Thinking more about @ATAFtax proposal, it seems highly significant. It returns to the spirit of G24 proposal which Inclusive Framework backed in early 2019 for OECD to evaluate (as 1 of 3). It was never evaluated, just discarded in favour of the secretariat's 'unified' proposal.
This new iteration creates a problem for the OECD, and for the G7 members who drive decisions there. It has become evident, again, that others are simply ignored. But the others are no longer standing quietly by...
Read 6 tweets
12 May
Results in: the court overturns EC finding of Luxembourg state aid to Amazon...
While confirming Lux state aid to Engie...
Read 14 tweets
28 Apr
As frustrated members made clear in 2020, the OECD Inclusive Framework does not make the decisions in the corporate tax negotiations they nominally lead, and nor even is it the G20 that gave the OECD the mandate - it is (still) the G7.

So where do they stand on Biden's 21% plan?
There are two important elements to this. First, do countries support a 21% minimum corporate tax rate? And second, do they support a fair distribution of the right to tax the undertaxed profits?
Starting with the US: safe to say, Biden administration supports Biden plan. That includes the 21% minimum rate; and at least opens the door to a distribution that doesn't give first bite at revenues to the headquarters country (hence GILTI/BEAT reforms).…
Read 21 tweets
23 Apr
It is *very* difficult to understand why so much effort is being made to keep the Irish government onside in the OECD talks. If the talks deliver, the business model is bust - and the government's focus should be on finding a better future that doesn't rob others of revenues.
Ireland imposes large revenue costs on others - we estimate this one jurisdiction accounts for some 3.7% of the global losses due to tax abuse. Global rankings graphic: Ireland ranks 11th on the CorporateHarm to other countries graphic: Ireland imposes $16 billion
As OECD negotiation on 'pillar 1' seem to be moving towards Biden administration's proposal that would not require global treaty change; and 'pillar 2' would be a coalition of the willing on a minimum tax rate - there'd no longer be an opportunity for Ireland or others to block.
Read 4 tweets
23 Apr
This is quite something. The French government's position on the EU move to public country by country reporting for multinational companies, a key measure to curb profit shifting abuses, appears to have been captured entirely by... the business lobby.
The French government's two-pager on its negotiating position - its critical demands - has been leaked. According to the scoop in @Contexte, the metadata of the pdf reveal the hand not of diplomats or ministers, but of a senior employee of MEDEF - the French business lobby group.
This revelation gives us two things: first, we can look at the position that MEDEF has convinced the French government to take up, and see the priorities of the lobbyists; and second, we can understand a bit more the wider French government position on tax, including at the OECD.
Read 21 tweets

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