Kolawole Omole

Tax Cooperation Policy Brief No. 40, 19 December 2024

Towards a UN Protocol for Taxing Cross-Border Services in a Digitalized Economy

By Abdul Muheet Chowdhary, Anne Wanyagathi Maina and Kolawole Omole

This Policy Brief offers a way forward on the United Nations Framework Convention on International Tax Cooperation’s (UNFCITC) protocol for taxing cross-border services in a digitalized economy. Such a protocol can provide a way to standardize and harmonize the existing plethora of widely varying Digital Services Taxes (DSTs), which can reduce political tension between the Global North and South, ease compliance costs and uncertainties for business, while providing a basis for the elimination of double taxation. The revenue generated can help bridge the Sustainable Development Goals (SDGs) financing gap and for the realization of human rights in the Global South. The Group of Twenty (G20) can act as a forum where key countries in the North and South can hammer out the architecture of the protocol for taxing cross-border services.

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SouthViews No. 270, 26 July 2024

Honduras’ Tax Justice Law: Increasing tax collection to achieve the SDGs without increasing tax rates

By Abdul Muheet Chowdhary, Kuldeep Sharma and Kolawole Omole

In April 2023, the government of Honduras submitted a tax reform bill called the “Tax Justice Law” to the National Congress through which it intends to reform the Honduran tax system with potential for improved revenue collection, that too, without introducing new taxes or increasing tax rates. The law aims at Constitutional recognition that tax collection must be progressive, change the principle of taxation from territorial to worldwide taxation of income, introduce Ultimate Beneficial Ownership requirements that inter alia aim to repeal bearer shares, facilitate exchange of information with other jurisdictions, eliminate banking secrecy for tax purposes, implement credit method in domestic legislation to eliminate double taxation, amend the Constitution so as to limit tax exemptions to a maximum period of 10 years, restore transfer pricing audits to check abusive claim of tax incentives and eliminate the possibility of forgiving tax debts. The provisions contained in the Tax Justice Law are timely and welcome, particularly in light of the Global Minimum Tax. They can improve government revenues, reduce public debt and create the fiscal space for achieving the Sustainable Development Goals.

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