TAX COMPETITION: An Unleveled Playing Field for Developing Countries?
Developing countries are often compelled to lower tax rates, limit the use of certain types of tax instruments, and/or provide particular tax advantages to firms which, do not only have high ability to pay, but also the sophistication to articulate worldwide tax planning and avoidance strategies. They do it with the goal to “win” investments, economic activity and job creation, over competitor countries. At the same time, given their own socio-economic and institutional constraints, they face tremendous challenges to raise fiscal revenues from other tax instruments. Representatives from international organizations (World Bank, IMF, OECD, UN and the South Center) will discuss how tax competition affects particularly the ability of developing countries to enforce a legitimate contract between governments and tax payers. They will also present different perspectives on how global tax rules could be improved to keep pace with a rapidly changing global business environment without further aggravating income disparities between developing and advanced countries.
Moderator: Lyne Latulippe