OECD Project on Harmful Tax Competition [Video]

Globalization has acted as a catalyst in integrating economies, dissolving political boundaries and changing system of governance, politics, finance, trade and investment. Now the World is witnessing reduced trade barriers, loosened exchange control, increased mobility of capital, skilled labor and other factors of production. This has led to increased competition amongst countries (similar to businesses competing domestically) to attract trade and investment.

There are many factors governing choice of the investors for e.g. stable currency, trustworthy legal system, transparent financial markets, infrastructure, skilled labor, tax incentives etc . Countries which are relatively less fortunate in terms of natural resources and geographical locations stands at a disadvantageous position to attract investment to boost their economies. Equity and fair competition demands that these countries should be provided with a level playing field and stronger economies should be discouraged from interfering with the capacity of these countries to pursue policies which are in …