OECD employment levels fell 4.0 pct in 2nd quarter

Progress reported on taxes for digital multinationals

PARIS, Oct 18, (KUNA): Employment levels in the industrialisecd countries of the OECD fell four percent in the second quarter, reflecting economic contractions but also temporary lay-offs due to the COVID-19 pandemic, a statement said.

Only 64.6 percent of eligible workers were on the job in the three-month period, corresponding to 560 million workers, 34 million down from he first quarter, the OECD said.

Largest drops in employment levels were reported in Norh America, wih an almost 9.0 percent decline in the US and Canada, but this is likely to be corrected as new data and categories come in.

Meanwhile, good progress has been made in two days of negotiations here on the issue of digital multinational companies and taxation but more needs to be done to arrive at a consensus on this thorny question, the Organisation for Economic Cooperation and Development (OECD) said.

In a statement after talks grouping 137 countries or jurisdictions, the OECDG20 framework that oversees the process reported “substantial progress” on a long-term solution that would set out conditions for the location of the fiscal payments by multinationals and also a minimum tax to help countries where there is no a physical corporate presence but where business is done.

“The aim is ensure that digitallyintensive or consumer-facing Multinational Enterprises pay taxes where they conduct sustained and significant business, even when they do not have a physical presence, as is currently required under existing tax rules,” the OECD statement said.

The statement recognised that progress had been slowed in these negotiations due to the current COVID-19 pandemic but also due to “political differences.” There is normally a mid2021 deadline for agreeing a global taxations system.

The identification and treatment of these political and technical challenges are essential to avoid disputes that could trigger global disharmony in the worldwide digital sector. This process is underway.

“The absence of a consensus-based solution, on the other hand, could lead to a proliferation of unilateral digital services taxes and an increase in damaging tax and trade disputes, which would undermine tax certainty and investment,” the OECD said.

“Under a worst-case scenario – a global trade war triggered by unilateral digital services taxes worldwide – the failure to reach agreement could reduce global GDP by more than 1.0 percent, annually,” it added.