The Independent Commission for the Reform of International Corporate Taxation (ICRICT) has said a minimum corporate tax rate remains effective way for countries of the world to generate revenue from multinationals.
The ICRICT in a new report titled, “A Roadmap to Improve Rules for Taxing Multinationals” says the strategy remains a way out for countries to “avoid a race to the bottom.”
The report, made available also suggested that multinationals should be taxed as unitary firms because they are groups of entities that are under single management control and have a single set of owners.
The report, the organisation said, is coming against the backdrop of revelations contained in the Paradise Papers which prompted citizens’ indignation against the way multinational corporations avoid paying their fair share of taxation.
“ICRICT is launching today a new publication presenting concrete solutions to reorient the existing system of international taxation away from serving the wealthy few and to focus it instead on addressing the needs of the vast majority of the population,” Lamia Oualalou, ICRICT media contact said.
In his intervention, José Antonio Ocampo, Chair of ICRICT, said: “Tax avoidance is about human rights. It is about people who are denied access to the services they need to lift themselves out of poverty because of tax avoidance. If large firms, including multinationals, and rich individuals don’t pay their fair share of taxes, it means no money for education, health care, infrastructure and fighting climate change. It is clear for everybody now we cannot count on foreign aid to address these questions.
“The critical issue is where the value is created, and how difficult it is to identify this as we move into a more complex global economy. We believe our proposal is the fairest one, and particularly the only one that answers the needs of both developed and developing countries.
“The existing system of international taxation has been exploited by multinationals. They even threaten their governments not to bring back any economic activity unless they implement a corporate tax they agree with. Tax avoidance and the push to governments to reduce corporate taxes are effectively preventing sustainable development.
“Not all countries have a seat at the table in the process OECD started three years ago to stop tax avoidance. The OECD should not be the only body where these discussions should take place. The international community has already created a body, the United Nations, to address global issues of common concern, and tax avoidance falls under this mission.”
The ICRICT, an organisation that 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, comprises of a broad coalition of civil society and labor organisations.
They include Action Aid, Alliance Sud, Christian Aid, the Council of Global Unions, the Global Alliance for Tax Justice, Oxfam, Public Services International, Tax Justice Network and the World Council of Churches.