MANILA, Philippines - Finance Secretary Cesar Purisima is pushing for the creation of a global system of tax identification numbers (TINs) in a bid to fight tax evasion and smuggling.
Purisima made the proposal during the G8 pre-summit meeting in London last June 15. The meeting, chaired by British Prime Minister David Cameron, saw discussions from more than 200 government leaders, business people and representatives from non-profit groups on improving transparency and corporate governance, reducing tax avoidance, and creating fairer and more beneficial international trade.
The G8 pre-meeting set the stage for the G8 Summit held in Lough Erne, Northern Ireland.
The G8, which stands for the Group of Eight, presents an avenue for the world’s eight wealthiest countries to discuss items of international concern.
Purisima said the implementation of global TINs would enable international monitoring of transactions by tax authorities that often lose oversight capability as financial actors move across countries and utilize mechanisms such as shell corporations to avoid tax.
“At this meeting of global leaders, it is imperative that the G8 lead the global community in declaring a war against corruption, smuggling, and tax evasion. It is high time that we explore the creation of a global system of tax identification numbers that will help us curb tax evasion and smuggling on an international level,†Purisima said.
The World Bank and the Tax Justice Network, a non-government organization that advocates global tax transparency, said that yearly losses to corruption, smuggling, and tax evasion combined are estimated between $4.5 trillion and $5 trillion, greater than the increase in Gross World Product in 2012.
Purisima said this amount could be reclaimed by countries and used for infrastructure, education, and other basic needs.
A system of global TINs, once adopted, should assign every individual a unique global TIN, coded by country, similar to what is reflected in telephone numbers, he said.