ICRICT: THE WORLD NEEDS TO MOVE ON WITHOUT THE U.S. IN THE FIGHT FOR FAIR TAXATION OF MULTINATIONALS
18 June 2020
The US decision to withdraw from global digital tax negotiations confirms that the G20/OECD process will not deliver the badly needed changes to international tax rules.
The COVID-19 crisis is imposing huge demands on government budgets that highlights the need for a global equitable international tax system, which ensures all multinationals pay their fair share of taxes.
Like the COVID-19 crisis, fair taxation of multinationals is a global problem which requires urgent action and the rest of the world can no longer wait for the US to unilaterally agree or disagree with what is being negotiated, without any respect for the other countries that are sitting at the table.
As a Commission, in our latest report, we indicate that this is the time for countries to make digital companies pay tax in every country they operate in, to ensure at least a minimum level of taxation. Countries have the right to impose digital services taxes, on all sales beyond a certain size, as long as they are imposed on a non-discriminatory basis.
Countries should therefore move unilaterally to introduce digital services taxes as an interim measure, to ensure immediate taxation of the digital multinationals, whilst continuing to work together to create a genuinely fair international fiscal architecture based on the principle of multilateralism.
Quotes of ICRICT commissioners (please feel free to use them):
Jose Antonio Ocampo, ICRICT chair, Professor at Columbia University
“The current crisis has generated a massive need for public sector resources. We cannot longer afford extremely profitable digital multinationals to avoid paying taxes where they make their profits. In Latin America and in the rest of the World, as governments look for new sources of revenues, it is imperative to start taxing those who have avoided paying their fair share in the past”.
Joseph Stiglitz, Professor at Columbia University and ICRICT commissioner
“Probably in November there will be a new administration in Washington that will believe in a rule-based international system and part of that rule-based international system is going to be tax cooperation, as you cannot have a world where you retaliate every time you don’t like something. Governments will soon look everywhere to raise revenue and taxing digital multinationals will be an important source of revenue to avoid austerity; this is why digital services taxes are an appropriate interim measure”.
Irene Ovonji-Odida, ICRICT commissioner:
“Developing countries historical commitment to multilateralism is evident in their continued engagement in the OECD BEPS process. This is despite its significant shortcomings of marginalizing developing countries from agenda setting and decision making on new international taxation rules. The world urgently needs leadership and renewed engagement from big powers to drive international cooperation that is genuinely inclusive, fair towards all countries including developing countries, and resolves challenges affecting people and planet”.
Read our latest report, “The global pandemic, sustainable economic recovery and international taxation”.
You can also watch our latest press conference, with Joseph Stiglitz, Thomas Piketty, Jayati Ghosh and José Antonio Ocampo launching the report. Please feel free to quote them.
MEDIA CONTACT: LAMIA OUALALOU
loualalou@gmail.com or by WhatsApp +52 1 55 54080974.
ABOUT ICRICT:
The Independent Commission for the Reform of International Corporate Taxation (ICRICT) aims to promote the international corporate tax reform debate through a wider and more inclusive discussion of international tax rules than is possible through any other existing forum; to consider reforms from a perspective of public interest rather than national advantage; and to seek fair, effective and sustainable tax solutions for development.