ActionAid backs FG’s lukewarm attitude towards signing OECD tax deal

ActionAid Nigeria has said that it was better for Nigeria and any developing nation to stand away from ratifying the current Organisation for Economic Co-operation and Development (OECD)TaxDeal, saying the current OECD tax deal is neither beneficial to the country or FDI attractors.

ActionAid equally pointed out that the worst concern about it was that it can only be reviewed in the next seven years.

It, however, said that while the new deal is disappointing, it underlines the need for comprehensive reform of international tax practice and treaties, adding that such reforms are expected to give countries in the global south voices in the process of negotiating international tax, rules through a possible United Nations Tax Body.

It also noted that this will also give increased rights to countries in the global south to effectively tax digital companies operating within their jurisdiction.

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According to a statement made available to BusinessDay in Lokoja, ActionAid equally applauds that the OECD recognises the need to better tax the digital economy and the fact that big tech companies need to be making bigger tax contributions.

ActionAid Nigeria expressed displeasure with the negotiation carried out by rich countries for their benefit.

“The deal calls for all countries to remove their unilateral measures to tax the digital economy, such as digital services taxes, and replace them with the new rules laid out in pillars 1 and 2. It is fundamentally unfair to ask countries in the global south to trade-off their unilateral taxation of the digital economy, in lieu of implementing a deal they were not part of negotiating, coupled with the fact that they will only marginally benefit from it,” it said.

“The fact that this new deal will take effect earliest in 2023 and cannot be reviewed until earliest 2030, is not good enough. Revenues are desperately needed in the global south to tackle the challenges posed by the Covid-19 pandemic and to fight poverty and inequality. Companies operating within the digital economy need to be compelled to pay their fair share of taxes,” ActionAid further said.