The International Discourse on the Right to Development and the Need to Reinvigorate its Implementation
By Yuefen Li, Daniel Uribe and Danish
The world is currently at an ebb for realizing the Right to Development (RtD). Weakening of multilateralism, de-globalization, the scars left by the COVID-19 pandemic, misinterpretation and dilution of the RtD, and inertia to reform international governance are among the multitude of reasons for this phenomenon. However, the need for a better, more inclusive and greener recovery, and the efforts necessary to attain the 2030 Agenda, have provided the international community an opportunity to reinvigorate the realization of the RtD. These efforts have shown the great relevance of RtD to promote a people-centred and fairer development process and the need for an international enabling environment in order to promote the kind of development we want.
This paper reviews the history of international discourse on RtD including major milestones, main divisive issues between the global South and the North, the evolution of voting patterns on intergovernmental outcomes, existing legal and political issues currently being discussed, the various mechanisms on the RtD, and recommendations on the way forward to revitalize the implementation of RtD at the 35th anniversary of the Declaration on Right to Development.
Marine Genetic Resources Beyond National Jurisdictions: Negotiating Options on Intellectual Property
By Siva Thambisetty
Negotiations on marine biological diversity of areas beyond national jurisdiction (BBNJ) convene after a significant hiatus during which intellectual property monopolies have come under intense normative and pragmatic scrutiny. This paper historicises developments in legal arrangements over intellectual property and biodiversity to propose several negotiating options on the control, use and circulation of marine genetic resources of areas beyond national jurisdiction. The text-based options presented here operationalise an equitable approach taking into account the interests of low power groups, cross-cutting issues and the often ignored question of the ownership and use of marine genetic resources through intellectual property rights.
South Centre Comments on Draft Model Rules for Tax Base Determinations
The South Centre today provided its comments to the OECD Inclusive Framework’s Task Force on Digital Economy (TFDE) on the Draft Model Rules for Tax Base Determinations. These rules are part of the overall OECD project on the taxation of the digitalized economy known as Pillar One. They determine the amount of a Multinational Enterprise’s (MNE) profits that will then be partially redistributed to market jurisdictions, which are expected to be largely developing countries.
The Model Rules for Tax Base Determinations are of importance as this affects the amount of tax revenues that developing countries will finally be able to collect under the so-called “Amount A” of Pillar One.
Direct Monetary Costs of Intellectual Property for Developing Countries
A changing balance for TRIPS?
It is startling that almost no discussion exists on the direct monetary costs for countries of the IP international regulatory framework. Indeed, on top of the inherent costs on ´access´ or ´learning´ abilities, there are some important tangible, measurable, direct monetary costs to countries. These costs are the financial payments that occur simply for the use of intellectual property. These payments are relevant in any discussion on the role of IP in the context of development.
An overview of some findings is presented in this report, with the aim of promoting an assessment and discussion at the WTO and other fora whenever there is a consideration of the impacts of the IP international regulatory framework, notably the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement) in individual countries.
Can Negotiations at the World Health Organization Lead to a Just Framework for the Prevention, Preparedness and Response to Pandemics as Global Public Goods?
By Viviana Muñoz Tellez
This paper advances that WHO Member States, having agreed to the objectives of advancing equity and solidarity for future pandemic prevention, preparedness and response, now must operationalize these. The paper offers suggestions for the ongoing WHO processes of: 1) review of recommendations under examination by the Working Group on Strengthening WHO Preparedness and Response to Health Emergencies, 2) consideration of potential amendments to the International Health Regulations (IHR) 2005, and 3) elaboration of a draft text for an international instrument on pandemic preparedness and response.
The global minimum tax should provide an incentive for developing countries to raise their effective tax rate as close as possible to their statutory tax rates, which are often higher than the 15% rate. The average rate for South Centre and G-77+China Member States is around 25%. In any case it should be at least 15%, since any undertaxed profits would in any case be taxed at that rate by developed countries. Leading OECD countries have already adopted measures to protect their source tax base, which they intend to retain, such as the UK’s diverted profits tax and the US’s base erosion anti-abuse tax. Poorer countries have even more reason to do likewise. They should consider introducing or strengthening measures such as an alternative minimum tax on deemed or book profits, versions of which already exist in many countries. These are compatible with the GloBE rules, and should be regarded as an essential complement, to ensure that it contributes to both fair and effective taxation of MNE profits.
South Centre Comments on Draft Model Rules for Nexus and Revenue Sourcing
The South Centre offers its comments on the Draft Model Rules for Nexus and Revenue Sourcing. As a procedural matter, the extremely rapid pace of discussions is a matter of great concern for developing countries, a matter also raised by the African Tax Administration Forum (ATAF). While an urgent solution is needed to the taxation of the digitalization of the economy, this must mean one which incorporates the interests of developing countries.
South Asia and the Need for Increased Tax Revenues from the Digitalized Economy
By Abdul Muheet Chowdhary
It is understandable why Pakistan and Sri Lanka, both members of the OECD Inclusive Framework, rejected the Two Pillar solution of the OECD on the taxation of the digitalized economy. Both Pillars would have deprived them of badly needed revenues, especially Pillar One. South Asian countries, amongst the poorest in the world and with high levels of external debt, must conduct a careful cost-benefit analysis if they are considering proceeding with Pillar One. Agreeing to this means foregoing unilateral measures on all companies, including those out-of-scope and losing vital policy space. Further, the agreement will have a long shelf-life and likely last for the next 30-40 years. Thus, all developing countries, including from South Asia, should be clear about what they are ‘getting into’.
A Review of WTO Disputes on TRIPS: Implications for Use of Flexibilities for Public Health
By Nirmalya Syam
The use of TRIPS flexibilities by WTO members involves interpretation of the obligations under TRIPS which can be challenged under the WTO dispute settlement system. Mutually agreed solutions, panel or Appellate Body decisions adopted in such disputes can thus impact the scope of TRIPS flexibilities to address, among others, public health objectives. This paper explores how the WTO dispute settlement system applies to disputes under TRIPS, and reviews the outcomes of the disputes relating to the implementation of TRIPS obligations in the context of pharmaceutical products. The paper points to both systemic and substantive concerns arising from the application of the dispute settlement system to disputes under TRIPS. It finds that the dispute settlement system is not aligned to the unique nature of the TRIPS Agreement in the WTO as an agreement that creates positive obligations, and consequently how jurisprudence arising under disputes concerning other covered agreements having negative obligations, have led panels and Appellate Bodies to adopt narrow interpretations of the scope of TRIPS flexibilities in some of the few disputes arising under the TRIPS Agreement. Moreover, mutually agreed settlements adopted in the context of some of the disputes arising under TRIPS have also led to the adoption of TRIPS plus standards, limiting the scope of TRIPS flexibilities. However, in a recent decision, the WTO panel has also relied on the Doha Declaration on TRIPS and Public Health as a subsequent agreement to guide the interpretation of its provisions. In this context, the paper advances some suggestions to address the systemic and substantive issues arising from the application of the dispute settlement system to the TRIPS Agreement.
Impact of a Minimum Tax Rate under the Pillar Two Solution on Small Island Developing States
Deadline: 15 March 2022
Pillar Two will end the race to the bottom in tax matters as allowed by the absence of a minimum global tax, likely affecting many financial services in some developing countries, removing the option for them to rely upon tax competition as an economic model. Hence, there is a need to understand how the Pillar Two rules are going to affect developing countries, particularly in small islands developing States where a large portion of their economies rely on tax-related financial services. It is necessary to consider development strategies aiming to deal with the potential disruptions and job losses posed by Pillar Two. These development strategies must provide pathways through which these countries can ensure employment opportunities to their people that require similar skill sets from some soon-to-be redundant segments of the financial industry. These can also highlight future financial sectors with potential where these countries can consider exploring/reorienting to benefit their economies.
Accordingly, this call for papers invites analysis on the effects of Pillar Two inSmall Island Developing States that are Member States of the G-77+China. The proposals can either provide generalized suggestions for a whole set of countries or provide customized advisory for individual countries.
This call invites established scholars, early career academics, PhD students and practitioners (policy makers, tax officials, lawyers) across multiple disciplines to submit abstracts.
Taux Minimum d’Impôt Mondial : Détaché des réalités des pays en développement
Par Sébastien Babou Diasso
Sous la direction des pays du G20 et de l’organisation de Coopération et de Développement Economique (OCDE), le Cadre Inclusif sur la réforme de la fiscalité internationale a adopté le 8 octobre 2021 une solution à deux piliers visant à résoudre les défis auxquels sont confrontés les pays dans le système fiscal actuel au niveau international. Cependant, le moins que l’on puisse dire, c’est que ces solutions n’apportent pas de réponses aux préoccupations de nombreux pays en développement, en particulier le taux d’impôt minimum de 15%, dans un contexte où la plupart des pays en développement membres de Centre Sud et du G-77+Chine ont déjà des taux effectifs bien au-dessus de ce minimum. Cette note vise à informer sur les niveaux actuels des taux d’imposition effectifs dans les pays en développement, pour lesquels les données sont disponibles, et à montrer pourquoi il ne serait pas pertinent de prendre en compte le taux minimum adopté dans le cadre inclusif. Mobiliser plus de ressources fiscales des entreprises multinationales est important pour les pays en développement pour la réalisation des Objectifs de Développement Durable. Nous recommandons donc que les pays en développement ignorent simplement le pilier deux et maintiennent leurs taux d’imposition actuels, ou les augmentent à des niveaux plus adaptés à travers l’application de mesures unilatérales plutôt que d’accepter d’être soumis à la procédure indiquée dans le pilier deux s’ils décident de l’appliquer.
Global Minimum Tax Rate: Detached from Developing Country Realities
By Sebastien Babou Diasso
Under the umbrella of the G20 and the OECD, the Inclusive Framework adopted on 8 October 2021 a two-pillar solution to address tax challenges arising from the digitalization of the economy. However, these solutions do not respond to the needs of many developing countries, in particular the global tax minimum rate of 15%, in a context where most developing countries, defined as Member States of the South Centre and the G-77+China, have an average effective tax rate higher than the adopted rate. This policy brief provides information of the current effective tax rates in some developing countries, and highlights why the minimum rate of 15% in Pillar Two is insufficient for them. Tax revenue mobilization is important for developing countries to achieve the sustainable development goals. It is thereby recommended that developing countries simply ignore Pillar Two and maintain their current higher rate or increase their rate to an appropriate level and enforce it through unilateral measures rather than the rule order under Pillar Two, which they will have to follow if they decide to implement it.
