Jayati Ghosh, Indian economist and Chair of the Independent Commission for the Reform of International Corporate Taxation (ICRICT), called on the European Union to think multilaterally about tax issues at the Tax Symposium co-organised by the European Commission and the European Parliament on Wednesday 25 October in Brussels.
“The global tax system is broken, in ways that it massively denies the ability of most countries of this world to get the taxes that are due to them”, she said at the start of the debate. “It enables illicit financial flows. It does not allow citizens, wherever they are in the world, to have access to the resources they need, especially women”, she detailed.
Ms Ghosh did acknowledge that the OECD and the EU had played an important role in drawing up the international agreement setting out a two-pillar solution for corporate taxation. But, in her view, the OECD/G20 agreement, which provides for a 15% minimum tax rate for multinationals, is insufficient. In addition, she considered that the finalisation of Pillar I on the reallocation to market jurisdictions of the right to tax the profits of multinational companies would not take place, due to the lack of interest shown by the United States (see EUROPE 13270/23).
In her view, the tax process should be moved to the UN level, as it would be “more inclusive”. “Developing countries have felt excluded”, she reported. A discussion at the UN would be “more transparent and open”, and would avoid a geopolitical imbalance.
MEP Evelyn Regner (S&D, Austrian), a member of the Subcommittee on Fiscal Affairs, was in favour of the idea. “I believe in the Brussels effect. The EU can be a pioneer and think outside the box, as in the case of data protection”, she argued. Ms Regner also called for the EU to abandon the unanimity rule for EU Council decisions on tax matters.
Tina Humar, Slovenian Director General for Taxation, did not oppose Ms Ghosh’s idea, but expressed her “fear of losing this momentum in switching the form”. “We lack information on how the work of the UN should differ from that of the OECD in order to achieve better results”, she stressed.
For Éric Coquerel, French MP and Chair of the Finance Committee in the French Assemblée Nationale, when international decisions are insufficient, they “should not prevent a country from being a little in the vanguard and going further with regard to its own taxation”. (Original version in French by Anne Damiani)