On 1 March 2022 the OECD announced that the OECD/G20 Inclusive Framework on BEPS has elected Marlene Nembhard-Parker of Tax Administration Jamaica to a new position of Co-chair of the organisation. Ms. Nembhard-Parker will chair the group jointly with Ms. Fabrizia Lapecorella of Italy, the current Chair of the Inclusive Framework.
Ms. Nembhard-Parker is also currently the Co-chair of the CFA’s Advisory Group for Global Dialogue on Tax Matters and a member of the United Nations Committee of Experts on International Cooperation in Tax Matters.
The creation of the new post of Co-chair follows a recent report on developing countries and the Inclusive Framework on BEPS that considered there was a need for the governance of the Inclusive Framework to be more representative of developing countries.
Around one-third of the membership of the Inclusive Framework consists of developing countries. The new co-chair can strengthen the representation of interests of developing countries in discussions and ensure that the Inclusive Framework gives enough attention to the needs of lower income countries. This will allow developed and developing countries to move forward together on designing a more balanced international tax system to support domestic resource mobilisation by developing countries.
When the BEPS reports were developed, some developing countries considered that they were not given enough chance to participate in the discussions. Through participation in the Inclusive Framework these countries have had a much greater impact on the development of the two-pillar approach to taxation of the digital economy.
Developing countries have still had problems owing to their limited resources, and the limited capacity in their tax administrations. This, combined with the fast pace of the recent work on international tax reforms, has meant that their ability to provide input into the process has been limited, especially during the pandemic.
The report on Developing Countries and the OECD/G20 Inclusive Framework on BEPS prepared for the meeting of G20 Finance Ministers on 13 October 2021 noted that regular assessments should be completed on the progress of developing countries, preferably in the form of an annual ministerial dialogue involving developing countries and G20 members. The report called on the development partners and the G20 to give their support to a major initiative in 2022 to provide capacity building support to enable developing countries to implement the measures on the taxation of the digital economy and the global minimum tax.
The report asked the stakeholders to look at governance arrangements within the Inclusive Framework to ensure that developing countries are included appropriately, through representation in leadership. The report recommended that the chairing arrangements for the Inclusive Framework could be extended to include two Co-chairs, including one from a non-OECD/G20 economy. Similar co-chairing arrangements could be considered for the Working Parties and other subsidiary bodies. In addition, consideration could be given to the revision of the memberships of the steering groups of the subsidiary bodies, to ensure that they more systemically include representatives from a range of non-OECD economies, including lower-capacity countries.
The latest appointment is an important step in this process.