Action Aid Nigeria supports reluctance Nigeria reluctance to sign Organisation for Economic Co-operation and Development pact.
Written by News Room on July 19, 2021
A Non-Governmental Organisation (NGO) Action Aid Nigeria supports the reluctance of Nigeria to sign onto the Organisation for Economic Co-operation and Development, OECD global tax reform deal despite applauding the body’s recognition on the need to better tax digital economy as well as big tech companies making bigger tax contributions.
The Group is displeased with the negotiation carried out by rich countries for their benefit which calls for all countries to remove their unilateral measures to tax the digital economy and can only be reviewed in the next seven years stands against development.
It sounded an alarm that the current global minimum tax of 15 per cent is a threat to both gains because sticking to such will not give Nigeria whose corporate tax is 30 per cent or other developing nations, at 28 per cent the fair share of their taxation which is too low and cannot significantly reduce profit shifting from the region and the benefits of a proposed minimum tax will be far below what is expected to fund the budget deficit in Nigeria, which will translate to the country’s inability to meet up with the fight against poverty and unemployment.
The Body which works in solidarity with people living in poverty and exclusion to achieve social justice, gender equality and poverty eradication said for a moderate stand, Nigeria, like most other African countries will need the global minimum tax rate to stand between 25 per cent to 30 per cent above the 21 per cent as initially proposed by the United States.
ActionAid Nigeria called on the government to keep up with the progressive moves by the Federal Republic of Nigeria to put in place unilateral measures to tax the digital economy through the Finance Act of 2019 and Significant Economic Presence Rule of 2020 until an acceptable and beneficial deal is met.
It also underlines the need for more comprehensive reforms of the international tax practices and treaties