ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Tax Reforms and Global Redistribution

Situating the Global South

The current international financial system needs an urgent overhaul as it continues to undermine workers’ rights. The recent agreement on the “Two-Pillar Approach” that aims to tackle global corporate tax avoidance and taxing the digital economy falls short of addressing the priorities of the global South, and threatens their sovereignty.

Designed by rich and powerful countries and their institutions, the current global economic system is broken and systematically works against the interests of the global South and the rights of their people. With inequality levels soaring, there is an increasing outcry for the need to reform the international tax system to ensure it is inclusive and fair.

The emergence of the digital economy and rapidly changing business models have disrupted the system which was conceived in the early 20th century. Tax revenue losses from global corporate tax avoidance range between $200 billion and $300 billion, with low-income countries losing out the most (Garcia-Bernado and Jansky 2021). Thus, taxation, a sovereign policy tool, has become increasingly multilateral and requires cooperation to arrive at solutions that lead to healthy policymaking. How revenues are raised directly affect marginalised groups who largely depend on public services for their health, well-being, education and livelihoods.

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Updated On : 14th Aug, 2021
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