Distinguished participants,
Distinguished speakers,
Welcome to the United Nations Workshop on Practical and Policy Aspects of Taxation in a Digitalized and Globalized Economy.
In his report, Our Common Agenda, the Secretary-General features fair and effective taxation as one of the most powerful tools of government. It is critical not only to investing in public goods but also to incentivizing sustainable development. It has a key role to play in recovering from the COVID-19 pandemic and accelerating SDG progress and climate action.
The United Nations is committed to advancing a more forward-looking international cooperation on tax matters, and more inclusive norm-setting and policy-shaping.
All countries must grapple with how to tax an economy that transcends borders and is no longer based on brick-and-mortar businesses. Countries seek the new ideas and opportunities that globalized business can bring. At the same time, they need to avoid ill effects, such as harmful tax competition and unnecessary or poorly targeted tax incentives.
Today, services move more fluidly than they have in the past. They can be profitably sold to clients in distant jurisdictions. This presents novel problems for taxation. Goods can also be supplied with limited physical presence in a country, further complicating efforts to tax income from the use or supply of these goods.
In order to raise much needed revenues, we need to find solutions that effectively tax these often extremely profitable activities, while recognizing the importance of a healthy investment climate for most countries. Effective and fair taxation for all players in an economy also goes a long way in boosting tax morale, which improves compliance and leads to increased revenues. This search for solutions may mean not trying to solve every issue at once, but identifying priority issues and dealing with them first, learning from that experience.
Jurisdictions have come together on various platforms to address this challenge. The OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (IF) is one example. They have been working on a two-pillar solution to address the tax challenges arising from the digitalized economy. Some of your countries participate in that work. I warmly welcome the OECD engagement in this workshop as expert presenters and colleagues. We look forward to hearing about your experiences.
I am also delighted to welcome some current and former members of the UN Tax Committee. The Committee’s latest update to the UN Model Double Taxation Convention between Developed and Developing Countries includes a novel provision on taxation of digital services.
This first day of the workshop provides an overview of the issues and initiatives. It includes both a general introduction and a panel on the regional dimension. The latter will bring forth key perspectives and experiences from countries in the different regions and how they stand in the current global debate, including opportunities for collaboration at regional and inter-regional levels. Dedicated sessions on Days 2 and 3 will then delve deeper into the technical aspects of the various options.
This workshop looks to encourage as consistent as possible an approach among countries and officials. This is essential in order to avoid double taxation, double non-taxation and corrosive tax competition, while ensuring to keep in view the special situation of developing countries, especially the least developed, and any consequent need for variable geometries, modalities and timings.
Further, the workshop design reflects the range of measures that can achieve multilateral ends, including of course conventions but also model laws, bilateral treaties and domestic legislation.
The workshop brings developing country officials together with a diverse group of top experts – from governments, international organizations, academia, civil society and private sector – who will serve as your presenters and facilitators in interactive sessions.
Participants should come away from the workshop with a better understanding of: What are likely to be the issue for your countries? What are the options realistically available for countries in different situations? And what are the likely consequences of actions or inaction? This will help you advise Ministers and other senior officials on policy options for your governments.
As your host and organizer, UNDESA hopes that all of you gathered in this virtual space find a shared and collegial learning environment, which will benefit your various efforts, individual and collective, toward fair and effective taxation for sustainable development.
I hope you enjoy an engaging three days and I encourage your active participation in the sessions.
Thank you.