KENYA: African Countries will open a dark chapter on International Taxation unless they reject the OECD / G20 plan to introduce a 15% global minimum tax rate.
The continent has lost $ 89 billion (KES 9.8 trillion) in corporate tax cuts, but the corporate tax rate is 15% lower, and the company pays millions of dollars in profits and profits. , reducing tax collection from African governments. The tax treaty does not take into account the reality of the tax system in developing countries.
About 123 countries, most of them developed, recently adopted two OECD / G20 tax plans: the first pillar provides tax capability in the “market country” where most countries operational, and the second pillar provides the lowest corporate tax rate worldwide. of 15%. , which will affect where many countries are headquartered.
Over 100 civil society organizations from across Africa have criticized the OECD/G20 proposal and are calling on the G20 heads of state summit to stop the deal. As organizations advocating for social, economic, and environmental justice in Africa, they echo the widespread critique of the OECD/G20 tax deal.
Executive Director of Tax Justice Network Africa, Alvin Musioma, states, “The proposal is inequitable to developing countries who are still recovering from the effects of COVID-19, not to mention that many multinationals commit corporate tax abuse by not only avoiding tax payment but also ignoring environmental, wage, and community development agreements, hindering Africa from fully benefiting from its natural resources.”
We, therefore, call on all developing nations in the Global South to reject the OECD/G20 proposal and instead support the call for a genuinely inclusive, just, and democratic process of international tax reform wherein the interests of developing nations and the African continent are taken into account.