Lidy Nacpil of the Asian Peoples’ Movement on Debt and Development (center) presses for new tax rules to be negotiated in a proposed United Nations Tax Body. Labor Leader Ka Leody De Guzman (left) calls for the scrapping of VAT and institution of a wealth tax in the country. Sanlakas Secretary General, Atty. Aaron Pedrosa, moderated the press conference.
The Asian Peoples’ Movement on Debt and Development (APMDD) today slammed the 15% minimum global corporate tax rate jointly proposed by the Organisation for Economic Co-operation and Development (OECD), G7, and G20, calling it the “tax deal of the rich” and instead called for the creation of a tax body under the United Nations (UN).
“Under the guise of, or pretending to be helpful as part of COVID-19 and multiple crises responses, the OECD, which is the organization of 37 wealthiest countries in the world, in collusion with the G7 and G20, are now putting forward and promoting a tax deal that will actually result in more benefits for corporations and governments of wealthy countries rather than the Global South,” APMDD coordinator Lidy Nacpil said.
“We are taking this occasion to express our rejection because in a few hours, the G20 will be convening its summit, and this is an important time to raise our voices,” she added.
World leaders are expected today to endorse plans for a global minimum tax on corporations during the first day of the G20 summit in Rome. The policy is supposedly intended to prevent businesses from skipping from country to country in search of lower tax rates.
“It sounds progressive because in some places the taxation of corporations is below 15%, so it makes it appear that they want to increase the level of corporate taxes to a minimum of 15%. But many of us in the south are rejecting this, because in reality, the average corporate tax in Africa and in Asia is 20% to 30%,” Nacpil stressed, adding that the 20% corporate tax rate is already one of the lowest in Southeast Asia.
Nacpil further said the 15% minimum tax rate means that many countries in Asia and in Africa will be pressured to lower their current corporate taxes, which will mean more benefits for corporations rather than for people and for the government.
“We want to end inequality in global tax rules and rulemaking, and one of the important steps is to create a global democratic and transparent body in the UN, to take up global tax rules,” she said. “This should be part of sweeping changes in the global economic and financial system to address its many flaws.”
Tax justice campaigners led by the Asia People’s Movement for Debt and Development (APMDD) denounce the “tax deal of the rich” at the University of the Philippines Hotel a few hours before the start of the G20 Summit in Rome.
The APMDD also rejected the second part of the “tax deal of the rich,” which is the proposed allocation of the net increase of resources raised from the minimum 15% corporate between the home countries of the corporations and where they actually earn their wealth or profits.
“Our tax experts have said quite clearly that in the proposed allocation, it is the governments of wealthy countries, where many of these corporations are headquartered or based that will get a bigger part of whatever net increases in tax revenues will be garnered from this proposed minimum tax rate,” Nacpil said.
“In the end, whatever little net resources are raised from this proposed minimum tax rate of 15% – and in some places it will not be a net benefit but a net loss – the countries in the south: in Africa, Asia, and Latin America, will be getting a smaller part of that allocation. The wealthy corporations and the governments of the wealthy countries will benefit the most from this deal,” she underscored.
Moreover, Nacpil emphasized the need to “tax the rich, not the poor.”
“What we have on our domestic tax systems in many countries in Asia and in the world are systems that are putting undue burdens on people, on communities; on women; and on many sectors of society like workers, farmers, fishers, indigenous peoples, urban and rural poor, even young people,” she said.
“These burdens come in the form of very regressive tax systems. Regressive means these tax systems put the greater weight of tax payments on poor and marginalized sectors, on communities, on women, much more than on the rich and elites,” she added.
The APMDD coordinator said this was wrong because “the very principle of taxing citizens is for the government to be able to provide services, address inequities, and lift people out of their situation of poverty and marginalization, and fulfill basic human rights.
“If these tax systems are doing the opposite – being more burdensome for the poor, the marginalized, for women – then there is something fundamentally wrong,” she stressed.
Nacpil also said for taxes should for work for women to remove gender bias, discrimination against women, and to make sure that tax revenues are used for services for women.
“In many countries, tax systems are gender-blind and gender-biased. There is bias against women – not just gender-blind, not just blind to the situations that women face that must be considered when it comes to tax policies, but also outright bias. Many of the tax systems reflect discrimination against women and non-recognition of unpaid care work,” she said.
“One of the major changes we would like to see is making taxes work for women – addressing bias, addressing discrimination, addressing undue burdens on women, and for tax systems to recognize the invisible care work that more often than not, it is the women that provide,” she added.
Nacpil further stated that APMDD is also calling for tax justice in the extractive industries, saying it is “one of the industries that has created a lot of havoc and damage in many countries in the world.”
“Our natural resources are plundered by multinational companies and yet they pay very little taxes. We want to transform the extractive industries to stop extractivism in our countries, but also to make sure thatwhatever extraction activities will be allowed should be heavily taxed,” she said.