African Response to G7 Tax proposals
Join AIDC, AFRODAD and TJNA webinar African Response to the G7 Tax proposals,
7 July 2021 at 14:00 (CAT).
Register in advance here:
|As organisations advocating for social economic and environmental justice in African states deeply impacted by corporate tax abuse we the undersigned echo the widespread critique of the G7’s commitments. See and endorse our African organisations statement rejecting on the G7 tax proposals here:https://docs.google.com/document/d/1IeOSu-XCQbKmPihywJJlMNHFrkE25fbETM7gln7M7yQ/|
The COVID-19 crisis has brought many developing countries to the brink of a fiscal crisis, resulting in what has been termed, a “debt pandemic”; last year, the majority of developing countries spent more on servicing their public debt than on public healthcare. This widespread debt crisis has been worsened by the continued loss of tax revenues as a result of profit shifting by transnational corporations. It has been estimated that Africa alone loses billions of dollars to corporate tax abuse each year, with UNCTAD arguing that curbing these illicit financial flows could cut Africa’s funding gap in half. Progressive organisations in these countries have continually pointed out how these illicit financial flows must be tackled in order to enable a truly just post-Covid recovery.
Following their 4-5 June meeting, the members of the G7 have announced their commitment to reforming the global tax system in order to cut down on cross-border corporate tax evasion. Having secured the agreement of the OECD Inclusive Framework on 1 July, the next step in the process is to secure endorsement at the 9 July meeting of G20 finance ministers. Given the current context, these proposals might seem like a historic breakthrough in the fight against corporate impunity.
However, the devil appears to live in the details. The OECD/G7’s proposals have been met with criticism and even outright rejection by many progressive organisations and tax justice networks, who argue that the two-pillar approach is ineffective, unambitious, and constructed primarily for the benefit of the wealthy nations constituting the G7/OECD. There are also serious concerns that the interests of the developing world are ignored in closed platforms such as the G7 and the OECD, where these proposals originate. Through their unilateral action, these nations are attempting to set the agenda on global tax reform without the equal participation of the developing world.Despite this criticism, the G7 are now scrambling to secure endorsement for their plan from the G20. We cannot allow the G20, which includes some developing countries badly hit by corporate tax abuse such as Brazil and South Africa, to rubber stamp the agenda of a wealthy few at the expense of the Global South.This webinar aims to bring together tax justice experts, activists, and members of civil society from Africa/the Global South in order to unpack the G7’s proposed reforms, examine their implications, and discuss the alternatives.
We really need to look into the details thoroughly, to see if there is something positive in the proposed pack we we could take before claiming for more. Let us reject with pragmatism: The bath water but not the baby!!!