Policy Briefs

Tax Cooperation Policy Brief 27, 21 December 2022

Taxing Big Tech: Policy Options for Developing Countries

By Abdul Muheet Chowdhary and Sébastien Babou Diasso

Even as the COVID-19 crisis wreaked havoc on the global economy, it gave rise to a small set of winners, namely Big Tech. The increasing prevalence of remote work and an acceleration of the digitalization of the economy allowed Big Tech companies to raise enormous revenues during the pandemic, which in some cases dwarfed the gross domestic product (GDP) of several countries. This policy brief explores the rising untaxed profits of Big Tech in particular, and the digitalized economy in general, and explains why the existing rules are insufficient. It also critically examines the solution that has been devised by the Organisation for Economic Co-operation and Development (OECD), an intergovernmental organization of developed countries. Finally, it outlines alternative policy options that are more suitable for developing countries to tax the profits of Big Tech.

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Climate Policy Brief 28, 14 November 2022

Technology Transfer and Climate Change: A developing country perspective

 By Nicolás M. Perrone

The role of technology transfer in climate change negotiations is vital. If technology is to help us mitigate and adapt to climate change, the international community needs to ensure sufficient innovation and technology transfer. One of the main challenges of the technology transfer regime for environmentally sound technologies is that a private and market-led model may not meet global technology transfer needs. This policy brief suggests that governments should explore market, hybrid and non-market approaches to accelerate the transfer of environmentally sound technologies. Developing countries’ governments should also explore cooperative approaches to improve their bargaining power, reduce costs and ensure adaptation and innovation capacity in the developing world.

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Tax Cooperation Policy Brief 26, 31 October 2022

Revenue Effects of the Global Minimum Corporate Tax Rate for African Economies

By Seydou Coulibaly

This policy brief provides the first piece of empirical evidence on the revenue implications of the recent global minimum tax rate reform agreement for African economies. We implement a regression discontinuity design to evaluate the effect of having an effective corporate tax rate of at least 15% on tax revenue collection for a panel of 28 African economies over the period 2000-2020.

The estimation results indicate that the implementation of the global minimum effective corporate tax rate of 15% proposed under Pillar II of the Organisation for Economic Co-operation and Development (OECD) Two Pillar Solution has a positive but not statistically significant likely impact on corporate tax revenue and total tax revenue at the conventional significance levels. This suggests that the global minimum tax deal is unlikely to increase tax revenue for African economies. These findings exhort the Inclusive Framework and all the stakeholders of the global tax reform negotiations to consider revising the global minimum tax rate rules to ensure that the agreement will effectively benefit African countries through better tax revenue collection.

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Climate Policy Brief 27, 25 October 2022

Understanding the Main Elements for an Operational Definition of Climate Finance

By Luis Fernando Rosales Lozada

An operational definition of climate finance could contribute to facilitating access of developing countries to needed public and private financial resources to support them on climate action required to face the climate crisis and its impacts. The climate finance definition adopted by the UNFCCC Standing Committee on Finance in 2014 aimed to clarify the goals of climate finance, but it has not solved the main questions about climate finance. Although agreeing on an operational definition of climate finance in the multilateral negotiations may facilitate the flows of climate finance, achieving an outcome still faces some obstacles.

It is urgent for developing countries’ government officials and delegations to be aware of the different elements that need to be considered to achieve an appropriate definition. This policy brief analyses the different elements to be considered in the negotiation of an operational definition of climate finance, that can be effective in promoting developing countries’ interests in the context of the current international framework to address climate change.

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Policy Brief 114, 19 October 2022

Reducing the Unnecessary Use of Antimicrobials in Animal Farming

By Dr. Viviana Muñoz Tellez

Antimicrobial resistance is aggravated due to excessive and inappropriate use of antimicrobials in human and animal health and in plant and animal agriculture. While international standards are being developed, governments are rolling out regulations with the aim to curb the overuse and misuse of antimicrobials, to preserve their efficacy for as long as possible. This Policy Brief discusses two new regulations introduced by the European Union (EU) on medicated animal feed (Regulation (EU) 2019/4 and veterinary medicinal products (Regulation (EU) 2019/6) that entered into effect on 28 January 2022. As part of the implementation of the regulations, the EU should devise a comprehensive plan to help implementation by countries and producers of animal food products of the Global South, linked to supporting the transition to sustainable agricultural systems and development.

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Policy Brief 113, 11 October 2022

A Breakthrough in Negotiations on Intellectual Property, Protection of Genetic Resources and Traditional Knowledge in WIPO?

 By Dr. Viviana Muñoz Tellez

This Policy Brief provides a brief summary of the current negotiations in the World Intellectual Property Organization (WIPO) for an international legal instrument or instruments relating to intellectual property to ensure the balanced and effective protection of genetic resources (GRs), associated traditional knowledge (TK) and traditional cultural expressions (TCEs). The General Assembly in June 2022 took a significant decision to schedule a Diplomatic Conference in 2024 to conclude a treaty on the protection of GRs and associated TK. However broader protection for TK and TCEs is not part of the decision. The 44th session of the WIPO Intergovernmental Committee on Intellectual Property and Genetic Resources, Traditional Knowledge and Folklore (IGC), held on 12–16 September 2022, focused on advancing text-based negotiations on these issues and two more sessions will follow. Developing countries must coordinate closely, in parallel to the IGC sessions, to agree on a common negotiating position for the treaty to be concluded no later than in 2024.

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Tax Cooperation Policy Brief 25, 30 September 2022

UN Model Tax Convention: Selective Territoriality – The Specter of Privileged Player in a Rigged Game

By Muhammad Ashfaq Ahmed

This paper lays out the chessboard on which taxes on international incomes from immovables are contested, bargained, and harvested as per pre-determined rules that are starkly tilted in favor of developed countries. This embedded and pronounced bias in the international taxes regime in favor of developed countries makes them a privileged player. The developed countries then make maneuvers to optimize on their economic gains at the expense of developing nations rendering it a rigged game setting. The paper derives its rationale from an exceptionally selective choice of territoriality on incomes from immovables, which was astonishingly not aligned with the expected reverse capital movement, that is, from developing to developed countries. The genesis and evolution of selective territoriality are traced through its various institutional development phases – League of Nations (LN), Organisation for Economic Co-operation and Development (OECD), and United Nations (UN). An overwhelming international consensus on selective territoriality on incomes from immovables notwithstanding, the UN’s role is brought into spotlight to argue that the developing countries may have suffered massively over the past one hundred years by instinctively believing in the UN Model Tax Convention’s (MTC) efficacy and blindly pursuing Article 6 in their bilateral double taxation conventions (DTCs). The inimical implications of herd-mentality on part of developing countries got galvanized in the particular wake of developed countries employing innovative optimization tools – citizenship/residence by investment programs, tax havenry, manipulable ownership structures, beneficial ownership legislations, and porous exchange of information regime – to maximize on the economic gains. The paper undertakes both normative and structuralist evaluation of selective territoriality to sum up that this is an unjust principle of distribution of fiscal rights at the international level particularly in asymmetric economic relationships, and can hold its ground only until developing countries attain full cognition of the reality and start raising their vocal chords in unison to dismantle it.  

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Tax Cooperation Policy Brief 24, 29 July 2022

A Global Asset Registry to track hidden fortunes and for asset recovery

By Ricardo Martner

Financial opacity and offshore hidden wealth have become a major economic and political problem. Tax havens continue to exist and provide financial secrecy services that allow the richest individuals in the world to hide their wealth from national tax authorities. Implementing a Global Asset Registry could help tax authorities to identify, record and tax all wealth, regardless of where it is held. It would also be a critical tool in efforts to recover stolen assets of countries suffering from widespread corruption.

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Informe Sobre Políticas 108, 25 de marzo de 2022

La incorporación de la equidad en el Reglamento Sanitario Internacional y en futuros instrumentos jurídicos de la OMS sobre preparación y respuesta frente a pandemias

Por Nirmalya Syam

Los Estados miembros de la OMS están a punto de iniciar las negociaciones más importantes que podrían establecer el paradigma de las obligaciones jurídicas internacionales en materia de preparación y respuesta a futuras pandemias. Estas negociaciones se centran en las enmiendas al Reglamento Sanitario Internacional (2005) (RSI), así como en la negociación de un tratado u otro instrumento jurídico en el marco de la Constitución de la OMS que complemente el RSI para garantizar una mejor preparación y respuesta ante futuras pandemias, basándose en las experiencias de la actual pandemia de COVID-19. La consideración más crítica para los países en desarrollo en estas negociaciones será la integración de las preocupaciones de equidad, actualmente ausentes de las normas y mecanismos existentes a nivel mundial para permitir a los países en desarrollo prevenir y responder eficazmente a un brote pandémico. En este contexto, este informe sugiere algunos elementos de equidad que deberían perseguirse a través de propuestas textuales específicas de los países en desarrollo mediante enmiendas al RSI.

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Rapport sur les politiques 108, 25 mars 2022

L’intégration de l’équité dans le Règlement sanitaire international et les futurs instruments juridiques de l’OMS sur la préparation et la riposte aux pandémies

Par Nirmalya Syam

Les États membres de l’OMS sont sur le point d’entamer les négociations les plus importantes qui pourraient définir le paradigme des obligations juridiques internationales en matière de préparation et de riposte aux futures pandémies. Ces négociations portent sur les amendements au Règlement sanitaire international (2005) (RSI) ainsi que sur la négociation d’un traité ou d’un autre instrument juridique dans le cadre de la Constitution de l’OMS qui complétera le RSI afin d’assurer une meilleure préparation et une meilleure riposte aux futures pandémies, en tirant parti de l’expérience de la pandémie actuelle de COVID-19. La considération la plus critique pour les pays en développement dans ces négociations sera l’intégration des préoccupations d’équité, actuellement absentes des règles et des instruments existants disponibles au niveau mondial pour permettre aux pays en développement de prévenir et de répondre efficacement à une pandémie. Dans ce contexte, ce document suggère quelques éléments d’équité qui devraient être poursuivis par des propositions textuelles spécifiques des pays en développement par le biais des amendements au RSI.

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Policy Brief 112, 28 June 2022

IPR-related Statistics in WTO Trade Policy Reviews

 By Peter Lunenborg

The WTO Secretariat Trade Policy Review (TPR) report is an important tool for a WTO Member which synthesizes objective trade-related information in a single document and enables the monitoring of developments in trade. Relevant statistics are therefore an important element of a TPR report.

Currently the practice of using statistical information on intellectual property rights (IPRs) across TPRs is not uniform. This Policy Brief surveys the use of IPR-related statistics in WTO TPRs with a view to exploring possible harmonization and inclusion of common information elements in future TPRs. Harmonized information would provide a baseline for comparison between countries and across time for a single country with respect to the level of IPR protection and immediate benefits derived from the creation of and trade in IPRs.

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Policy Brief 111, 13 May 2022

Advancing Global Response to Antimicrobial Resistance: Examining Current Global Initiatives

By Mirza Alas

Antimicrobial resistance (AMR) is a severe ongoing crisis threatening our health systems. Since adopting the WHO Global Action Plan on AMR in 2015, there has been progress, particularly in improving awareness, surveillance and implementation of infection, prevention, and control measures. However, there has been a slower response related to optimizing the use of antimicrobials in the animal sector and actions related to the environment. Unfortunately, the COVID-19 pandemic has also undermined the implementation of activities to address AMR, including shifting resources to other areas and deprioritizing responses to AMR due to the ongoing pandemic. While national-level actions are at the core of the AMR response, given its global nature and impact, there is broad recognition of the need to ensure that national efforts are complemented with measures at the global level. Examining global initiatives to address AMR and how they can be strengthened to accelerate action is critical to better understand the importance of global coordination and increasing investment to close the gaps that remain.

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