Dynamic Duo: Meet The BEPS Inclusive Framework Co-Chairs


Marlene Nembhard Parker and Fabrizia Lapecorella discuss their partnership as the first co-chairs of the OECD inclusive framework on base erosion and profit shifting and speculate on the future of women leading international tax.

This transcript has been edited for length and clarity.

David D. Stewart: Welcome to the podcast. I’m David Stewart, editor in chief of Tax Notes Today International. This week: women in tax leadership.

On March 1 the OECD announced that Marlene Nembhard Parker would co-chair the BEPS inclusive framework. In this newly created role, she would be joining Fabrizia Lapecorella, who had taken on the leadership of the group just two months prior.

Joining me now is Tax Notes chief correspondent Stephanie Soong Johnston, who recently caught up with the co-chairs to talk about their new roles. Stephanie, welcome back to the podcast.

Stephanie Soong Johnston: Thanks. Good to be here as always.

David D. Stewart: To begin with, could you give listeners some background on the two new co-chairs and what led to the appointment of an additional position?

Stephanie Soong Johnston: Sure. I spoke with Fabrizia Lapecorella, who is director general of finance at the Italian Ministry of Economy and Finance. And Marlene Nembhard Parker, who’s chief council for legislation, treaties and international tax matters at Tax Administration Jamaica.

As you mentioned, Lapecorella took over as chair of the inclusive framework on BEPS on January 1. Nembhard Parker was announced as co-chair of the group on March 1, which just happened to be the first day of Women’s History Month. I thought it would be timely to get them both on the podcast.

As you mentioned, this is the first time the inclusive framework has elected two people to lead the group. If you recall my previous appearances on the podcast, the inclusive framework is a group of 141 OECD and non-OECD jurisdictions that was set up in 2016.

It’s committed to implementing BEPS project measures and is setting additional standards to curb corporate tax avoidance. It’s leading the work on implementing the two-pillar global corporate tax reform plan that you’ve heard me talking a million times about so much on this podcast.

This group is technically an enlargement of the OECD’s Committee on Fiscal Affairs, or CFA, which is the OECD’s primary standard setting body for tax issues. The chair of the CFA has always been the chair of the inclusive framework.

Lapecorella herself has been deeply involved in the CFA Bureau since 2012, and was elected to replace Martin Kreienbaum, who is the director [general] of international taxation of the German Ministry of Finance. It’s notable that she is the second woman and the second Italian chair since the CFA’s founding in 1971.

Nembhard Parker has also been a longtime participant in the international negotiations on the world stage, and particularly through the U.N. Committee of Experts on International Corporation Tax Matters. She’s also co-chair of the CFA’s Advisory Group for Global Dialogue on Tax Matters and is a former member of the inclusive framework steering group.

Now, the co-chair position was created after the OECD sent a report to the G-20 finance ministers in October 2021. That report took stock of developing countries’ progress in the inclusive framework, and recommended that the group’s governance structure should represent developing countries better. So, this co-chair position was a natural fit.

David D. Stewart: All right. Let’s go to that interview.

Stephanie Soong Johnston: Thank you both, Marlene and Fabrizia, for your time today and sitting down with me to speak about the inclusive framework and the new co-chair structure of the framework.

It is Women’s History Month and I think it’s pretty awesome that there are two very strong women in tax leading the very important work that the OECD is doing in the international sphere.

I wanted to get a sense of how you first got involved with the inclusive framework. How do you balance this work with your day job?

Marlene Nembhard Parker: Thank you, Stephanie. And thank you very much for inviting me to spend this time along with my co-chair, Fabrizia, in a different setting. A more relaxed setting, I guess we could say, but it’s always work.

Well, I became involved in the inclusive framework in 2016 as a consequence of being the person at Tax Administration Jamaica in charge of legislation and international tax matters. It was a part of my job to lead the work of the BEPS measures and the introduction of them into Jamaica.

Jamaica became the 85th member of the inclusive framework in 2016. I, along with my co-delegate, Bevon Sinclair, became the leaders on the work for Jamaica. In international matters, we usually have a technical as well as a legal person in the international forum. So, that was my involvement.

In terms of balancing, I think it’s important to have a supportive tax administration and government behind you. It is a part of your work. The fact that you have their backing as well as their confidence is very helpful, and they allow for the time for you to do both. That has been my experience.

Fabrizia Lapecorella: Well, in some senses my story is very similar to Marlene’s story.

In the sense that I was involved in the exclusive framework as at the beginning when it was established by the OECD and the G-20 in Kyoto in 2016. At the time I was the head of delegation, but since 2012 I was member of the Bureau of the Committee for Fiscal Affairs. When the inclusive framework was established in Kyoto, I became a member of the steering group of the inclusive framework [on BEPS] right from the beginning of this thing.

As to the dealing with the work that is carried out in that very demanding forum and our own domestic work, that is it’s always been certainly challenging, but it has become really, really challenging these days, and Marlene I think you can say that I’m not exaggerating.

It’s always been demanding, but now it’s extremely challenging. Because the amount of work, the complexity of the technical work, the very high frequency of the meetings that are called on a weekly basis. Sometimes more than one time per week.

We are all aware that we, first of all, have to respond to a political commitment taken by our ministries and we are all aware that we are doing some, so to speak, sort exceptional work there. We try to do our best.

Stephanie Soong Johnston: I know that the inclusive framework chairship is now co-chairs. There’s one co-chair from developed countries and one from a developing country. That was a key recommendation in a report to the G-20 finance ministers as a way to improve the inclusive frameworks so that developing countries can better benefit from it.

Briefly, how is this co-chairship working in practice? What do you hope that this new arrangement will accomplish?

Fabrizia Lapecorella: Thanks, Stephanie. Well, let me say that I just started. I was appointed last year, but I started in this role as of January this year.

At the end of last year I was invited by the finance minister of Jamaica to take part to a very interesting high-level conference with a number of very committed ministers from developing countries, the brass of the tax officials. I was invited as the Italian representative of the tax administration. So, as representing the Italian G-20 presence, I was asked to report back in that context what was the main accomplishment for the stream of work of the G-20 on tax and development, which I did.

After that conference, the Jamaican ministers actually circulated a very interesting report on the meetings, making very clear what were the expectations of developing countries as a follow-up to the Italian G-20.

Against that background, when I started I actually discussed with the OECD secretariat the right way to propose to colleagues to start with the establishment of co-chair appointed by the other members, selecting a colleague from a known G-20 country.

We launched the procedure and Marlene was elected by all our colleagues.

For me, it was particularly fortunate. We’ve been knowing each other for long. We’ve been together all the time. When sitting at the steering group, we’ve always been sitting together. It is “I” for Italy and “J” for Jamaica. This also is an element that helps, the fact that we know each other very well, and we can rely on each other to do this job.

I think this is more than a signal to developing countries. On the real willingness of making the process, of making inclusive process, that is so challenging for most of them. This is it, I think.

We expect by sharing the responsibility of touring this extremely large forum to be able to reflect as closely as possible, as well as possible, the needs of the very diverse countries and jurisdiction that are sitting out as well.

Stephanie Soong Johnston: It actually warms my heart that you both are already friends, and now you’re co-leading this very large job. I love that you both already have established working relationship and also get along really well. That’s really nice to hear it.

Marlene, would you like to weigh in?

Marlene Nembhard Parker: I will. I want to support a lot of what Fabrizia just said, Stephanie.

The statement of outcomes of that meeting settled some of the challenges that are well known that developing countries have had with the governance process of the inclusive framework: the complexity of the measures, the voice sometimes that developing countries feel that have not been heard. It was important.

It’s interesting that it was under the presidency of Italy, of the G-20, that this focus on the needs of developing countries be met. That gave rise to the subsequent discussions.

I think the intention is for us to work together to ensure that the entire constituency of the inclusive framework sees the benefit of the inclusive framework. I think we also have to realize that we are all on a kind of learning curve.

As Fabrizia said, it’s much more complex, much more challenging to tackle the issues that we are now dealing with in the inclusive framework. Developing countries who are at different capacities have in some instances been left behind in terms of the pace at which the work is going.

I think we, with the secretariat, will have to work closely about how we address that gap. So that some of the members of the inclusive framework are not left behind while others are moving ahead because of their capacity issues and other concerns that they have. It is, as she said, a lot more challenging.

But as she said, we have sat together for many years beside each other and we are reflecting and I said, “Boy, those days.” We now look back on those days, Fabrizia, and think that it was a fun time. I mean, it was hard work, but our conversations were light.

Now, we just have to be so laser focused on what is happening. It’s a different environment and different in many ways. People are looking at the post-COVID-19 response, how their countries are going to be built, how does this global tax deal fit into that, and so on. There are a lot more weightier issues to consider.

Stephanie Soong Johnston: Shifting in focus a little bit. It is Women’s History Month as you are aware. How significant is it to you that now two women are leading this inclusive framework? What does it mean to you?

Marlene Nembhard Parker: Well, I believe that the capacity of women to lead in any situation is settled. I think in addition to the technical expertise, we do bring a kind of instinct for what is unsaid. We are able instinctively to kind of sift through and to have that inner voice or that additional ability to hear what is unsaid and what needs to be said to provide clarity.

We are natural consensus builders, and I think that given the current situation that we are in, I think that women bring that additional ability as well.

I think the real question though, Stephanie, is whether we are the right persons who should be leading the inclusive framework at this time. I think the fact that we are women is good, but what do we bring to the table with our technical expertise?

I think the fact that we are both here is a testimony to the confidence that has been placed in us by our colleagues. I think I can speak on behalf of Fabrizia when I say we feel honored and privileged that we have been given the opportunity to lead at a time like this. Where we are in a pandemic still, economies have been devastated, particularly developing countries. There’s climate change. There are supply chain issues. Now there’s a war and [Sustainable Development Goals], and domestic resource mobilization, and all of these issues swirling around.

Where does global tax fit into all of that? How can it be a solution? We have to lead that effort from the global tax perspective.

Challenging, yes. But I also believe that it creates a real opportunity for multilateralism to provide a solution. The solution of digitalization has its many issues, as we are aware, but I think that our work will probably have to go beyond just digitalization. Because there are other issues that developing countries in particular are concerned about, and they have been the ones that have been most impacted by the pandemic.

I think it presents a real opportunity for us to be able to work together and to work with the OECD secretariat, and our colleagues on the steering group of the inclusive framework itself, as well as other stakeholders who are observers to the OECD.

Fabrizia Lapecorella: Well, very quickly, Marlene said very interesting and important things. Maybe I should add simply that what we are doing is, we’re just starting.

The reality of a process, of a unique extraordinary process where developed economies, emerging economies, and developing countries are sitting around the same table to write down rules.

Last year what we have achieved was an extraordinary outcome, historic outcome, as was defined by many people. The historic outcome of achieving a political agreement on substantive rules that change completely the international tax architecture. Now we are getting to the even more difficult phase of writing down the legislation, the rules. This means it’s even more difficult than the political agreement on the principles of the new.

This is the reality of the extraordinary evolution, standard setting at a table with 141 countries and jurisdictions. The process requires every kind of soft skills. To be honest, I think that women are endowed with soft skill of much higher quality than men are.

Stephanie Soong Johnston: Can you speak to your experiences working in leadership roles in tax? What were the challenges and advantages that you’ve faced? What is the future of women in international tax leadership?

Fabrizia Lapecorella: Well, it is certainly a world that has been traditionally for years the domain of men. But slowly women are gaining space and also significant space.

I don’t know about Marlene, but I mean, in my division, in my year at the Ministry of Economy and Finance in Italy, we are step by step rebalancing the gender gap at the level of the ministry and in the department. In my department, there are a number of women that are proving more and more essential to the performance of the whole department. I think it is not an easy area, but at the international level, I think we are encouraging something.

At the end, now in the inclusive framework, I think definitely half of the head of delegation is female. In the steering group we have a third of delegates that are female. If I look back, you can see that very important step forwards have been made with input of women in tax.

For instance, the whole, the BEPS project, that then led to the establishment of inclusive framework, was similarly started by a woman colleague of mine. It was Manal Corwin at the U.S. Treasury who forced the brainstorming on the issue of international tax avoidance in the context of a globalized economy.

It is happening, but it will take time.

Stephanie Soong Johnston: Marlene, what advice would you give for women who aspire to become leaders of the global tax stage?

Marlene Nembhard Parker: Well, I think one of the first things you have to ensure is that you have the backing of your tax authority, you have the backing of your country. I’m speaking now specifically for women who are coming from a public sector background, working in tax administration. Perhaps my advice is more applicable to developing countries in particular, because that has been my experience. I’m going to speak from my own experience and what helped.

I had a very strong support. I’ve maintained a very strong support from my government, from my tax authority. I have a very supportive staff that I also supervise. I think that support is important. The confidence that they place in you is important to allow you to participate and grow in this field.

I think as well that it’s important to build relationship with your colleagues in the global sphere. Whether it’s global forum inclusive framework, other stakeholders. It’s important for you to build a network of experts in the field who can provide mentorship.

Mentorship has been very, very important, I think in my own development. There are a few persons that have become my mentors, and people that I speak to through the U.N. just on the global tax landscape circuit that I have gained a lot from. It helps fulfill your knowledge gap as well.

I think being open to the rich and diverse views of your colleagues, to realize that they are under the same kind of pressure that you may be under. Even when there is passionate debate going on, say between developed and developing countries, coming with different perspectives, it’s important to listen to what your colleagues are saying, and to understand where they are coming from.

People are very passionate about tax, and so it can come across as if it’s personal. It is not. They are passionate about their work as you are. I think it’s important to listen to what the other person is saying. Listen with a view to understanding and not just to reply. I think that is also important.

Developing an awareness that international tax requires an understanding of global geopolitical dynamics I think is important. There has to be a sensitivity to cultural dynamics as well, and also a sensitivity to the concerns of taxpayers. The taxpayers that we are now dealing within BEPS are particularly multinational enterprises, and I think that it’s important to understand their own concerns. The issue of certainty is one of the building blocks, for example, of pillar 1 and a predictable environment. I think it’s important to understand what those concerns are so that our responses can be informed.

I think reading extensively is also very helpful. If you are in the position to do some writing blogs and share your opinion, if that is allowed, I think that’s important.

Finally, I would advise women to share your knowledge with others. Mentor somebody else. I think we are seeing a growth now, particularly in the U.N. Committee where I also sit, of younger women who are bright, who are dynamic, and who have a voice. It really is a joy for me to watch, to see younger women coming in this space and sharing their knowledge, sharing their ideas. It’s good for the future of global tax.

Stephanie Soong Johnston: I just want to thank you both for your time today, and I wish you all the best for the next steps. It’s a really exciting time to be in international tax and in covering the inclusive framework. Thank you again for your time.

Marlene Nembhard Parker: Thank you, Stephanie.

Fabrizia Lapecorella: Thank you, Stephanie, for your patience.

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