Recent developments in globalization raise important issues regarding taxation policy and economic development. First, trends in capital income tax raise concerns about a possible race to the bottom or harmful competition. Second, lack of tax policy coordination results in large losses in tax revenue due to profit shifting by multinational corporations. These practices undermine revenue mobilization in the least developed countries, which also suffer from capital flight and other forms of illicit financial flows. This paper discusses how improved governance of the global financial system and enhanced harmonization in taxation policies may help address these important development problems.
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Multilateral trade rules have maintained stable and predictable trade flows. Developing countries increased their participation in world markets but marked asymmetries persist; not all countries are benefitting from trade. Successive trade rounds and numerous regional trade and bilateral investment agreements led to significant loss of policy space and fragmentation. Special and differential treatment has not provided necessary flexibility for implementation of development policies while the principle of less than full reciprocity is eroded. Stronger multilateralism, effective overseeing and enforcing role by WTO and greater focus by developing countries in negotiating flexible rules (…
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Welcome to the United Nations
