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Plenty of reasons why the Labour-led govt in NZ should not support Chris Liddell as head of OECD. One further reason is that his appointment would be likely to damage progress towards fairly taxing multinational corporations, which the OECD has been working on. >
The OECD is consulting on a framework for taxing multinationals, which moves towards allocating profits from multinationals to different countries+establishing a minimum corporate tax. This is essentially a way to ensure multinationals, esp. big tech, pay their fair share. >
The OECD has been criticised for not going far enough, but it is moving towards ‘unitary taxation’ (in my view the fairest and most effective way to tax multinationals - more on that later). Chris Liddell is unlikely to be enthusiastic about this move. >
He served under a Trump administration that tried to block these talks on fair taxation of multinationals ( https://www.ft.com/content/1ac26225-c5dc-48fa-84bd-b61e1f4a3d94). The Trump administration also imposed tariffs on France in response to a very cautious French digital services tax,+threatened tariffs on the UK. >
Liddell, as Deputy Chief of Staff for Policy Coordination, must have been aware of this position. It is also relevant context that he was previously a Senior Vice-President at Microsoft, a digital multinational likely to be affected by the OECD’s reforms. >
The OECD is aiming to reach consensus on the approach to taxing multinationals in mid-2021 ( https://www.politico.eu/article/amid-political-rancor-global-digital-tax-deal-pushed-back-until-mid-2021/). The head of the OECD, the position Chris Liddell is going for, is appointed at the latest by March 2021. >
The Labour-led govt should be championing a progressive approach to taxing multinationals. A unitary approach - which allocates profits based on a combo of sales / operations / labour - is the fairest approach which would likely boost NZ tax revenue+tax revenue in Global South. >
Supporting Liddell could well set this agenda back. And this is just one area of OECD action, to say nothing of climate change and the OECD’s anti-bribery and corruption work (for which Liddell is likely to have dubious legitimacy because of his association with Trump). >
Also worth noting that the OECD has been widely criticised, including by commentators in the Global South, for being a self-appointed group of wealthy countries with no official international legitimacy. Liddell’s appointment would damage the body’s standing even further. >
If you want to know more about ‘unitary taxation’, which NZ should push (and could adopt unilaterally) check out this video: https://publicservices.international/resources/videos/the-answer-is-unitary-taxation?id=10456&lang=en. Or have a look at this report: https://pop-umbrella.s3.amazonaws.com/uploads/1acfb317-6e5a-4273-b950-57b3ed085d6b_Taxing_Multinationals_PSI.pdf. >
Simple example of how (one model of) unitary taxation works: if Microsoft has 2% of its global sales, labour, and operations in NZ, it must pay corporation tax in NZ on 2% of its global profits. At the moment a multinational can book profits in low-tax jurisdictions to avoid tax.
(Had to repost tweets, apologies, because either I or Twitter had done something funny with the thread. Probably me.)
(Unfortunately can’t watch the Liddell interview from Q+A in full because it’s not available to ppl outside of NZ. Haven’t seen so much writing on the OECD+its agenda, what Liddell’s likely positions wd be+how they relate to NZ’s positions, except here: https://i.stuff.co.nz/national/300142539/will-nz-back-chris-liddell-for-oecds-top-job.)
