The Friedrich Ebert Stiftung – Africa Union Cooperation office in collaboration with Tax Justice Network Africa, Public Service International, and Alternative Information and Development Cooperation have co-organized two follow-up webinars on the 16 and 28 of September respectively on the issue of reforming the international taxation system and the BEPS 2.0 initiatives by OECD.
There has been little public analysis of the likely effects of reforms and questions have been raised as to whether the current BEPS 2.0 initiative by OECD is comprehensive enough to provide the drastic changes the international tax system needs to keep up with the changing landscape of multinational companies. To that the effect, the webinars served as a platform to review the current BEPs 2.0 initiative and to examine the entry points for further discussions. Speakers and participants include senior country policymakers, tax administrators, members from the international organizations and representatives from academia, the private sector, civil society, and regional tax organizations. The virtual conference sessions covered the following six thematic areas:
Participants on the virtual conferences agreed that BEPs initiative have resulted in helpful solutions for some of the tax avoidance mechanisms. But it has failed to address the core problem: companies are still allowed to move their profits wherever they want and to take advantage of very low tax jurisdictions. Also, experts highlighted areas where further negotiations and improvement required regarding the proposal put forward by the OECD. The panel reiterated that the international tax system has historically been against developing country interests. The direction of current reforms in the OECD Inclusive Framework will only end up reinforcing this status quo. With the OECD Inclusive Framework mandated by the G20 to find a solution by the end of 2020, experts emphasized that developing countries must consider how they respond collectively and strategically. Also, the issue of a common continental voice and a more open negotiation platform for CSO’s are highlighted.
Also discussed was the taxation of the digital economy and the recent OECD proposals for protecting the tax base in that ever-increasing economic sector. As economies are digitalizing rapidly, any reform of tax rules must pay attention to it.