Where Least Developed Countries Stand in the Digital Debate

Prof. Annet Oguttu, Professor of Tax Law at the University of Pretoria in South Africa is our distinguished expert in this second instalment of the UN Tax Talk series. She analyzes the pressing question of “Where Least Developed Countries (LDCs) Stand in the Digital Debate” and presents practical conclusions that help LDCs in navigating the policy debate.

Digital value chains and business models are challenging the traditional nexus of conducting commerce in a territory and physical presence in that territory. This imbalance tilts in favour of developed (resident) countries against LDCs (market countries). Why? Because under current international tax laws, countries in which users are located are not able to tax the value created within their borders without causing double taxation. 

Given the high profits accruing to many highly digitalized businesses during the COVID-19 pandemic, while many “bricks and mortar” businesses have been unprofitable, there is now even greater urgency to update tax treaty rules to allow market states to exert the taxing rights allowed for in their domestic laws.

Prof. Oguttu delves into the challenges faced by LDCs in shaping global consensus around a practical international tax policy response to this challenge.

Prof. Oguttu is a distinguished scholar of international tax law, having extensively researched, taught and written many books and articles on this topic. She is a member of the UN Financial Accountability, Transparency and Integrity (FACTI) Panel, as well as South Africa’s Davis Tax Committee. 

Feedback or questions? Contact the International Tax and Development Cooperation Branch, Financing for Sustainable Development Office, UN DESA (email: fsdcapdev@un.org).