This paper investigates the costs and benefits of concluding double tax treaties with investment hubs. Based on a sample of 41 African economies from 1985 to 2015, the results suggest that signing treaties with investment hubs is not associated with additional investments; yet, these treaties tend to come with non-negligible revenue losses. Building on a theoretical model, the paper investigates the role of treaty shopping in driving nominal investment flows and provides indirect evidence for its importance in the sample.
This paper investigates the costs and benefits of concluding double tax treaties with investment hubs. Based on a sample of 41 African economies from 1985–2015, the results suggest that signing treaties with investment hubs is not associated with additional investments; yet, these treaties tend to come with nonnegligible revenue losses. Building on a theoretical model, the paper investigates the role of treaty shopping in driving nominal investment flows and provides indirect evidence for its importance in the sample
Tax treaties are believed to increase cross-border trade and investment by reducing international tax burdens. The pursuit of tax treaties is therefore advanced as an integral component of U.S. foreign aid policy, which increasingly favors indirect assistance in the form of fostering trade and investment over traditional direct assistance in the form of donor funding. The importance of tax treaties is especially advanced in the context of U.S. relations with Sub-Saharan Africa, where poverty-related conditions are extreme and foreign trade and investment minimal. Yet despite many years of consistent promotion there are currently no tax treaties between the United States and the developing countries of Sub-Saharan Africa. This article explains the apparent contradiction by presenting as a test case a hypothetical tax treaty between the U.S. and Ghana. The case study illustrates that in today's global commercial climate, traditional tax treaties provide few tax benefits to and indeed may negatively impact private investors. Consequently, the continuing absence of tax treaties can be explained by the lack of incentives for private investors to pressure the U.S. government to conclude these agreements. This article concludes that means other than increasing the international network of tax treaties must be pursued if the goal to increase trade and investment to developing countries is to be achieved.
Tax treaties are believed to increase cross-border trade and investment by reducing international tax burdens. The pursuit of tax treaties is therefore advanced as an integral component of U.S. foreign aid policy, which increasingly favors indirect assistance in the form of fostering trade and investment over traditional direct assistance in the form of donor funding. The importance of tax treaties is especially advanced in the context of U.S. relations with Sub-Saharan Africa, where poverty-related conditions are extreme and foreign trade and investment minimal. Yet despite many years of consistent promotion there are currently no tax treaties between the United States and the developing countries of Sub-Saharan Africa. This article explains the apparent contradiction by presenting as a test case a hypothetical tax treaty between the U.S. and Ghana. The case study illustrates that in today's global commercial climate, traditional tax treaties provide few tax benefits to and indeed may negatively impact private investors. Consequently, the continuing absence of tax treaties can be explained by the lack of incentives for private investors to pressure the U.S. government to conclude these agreements. This article concludes that means other than increasing the international network of tax treaties must be pursued if the goal to increase trade and investment to developing countries is to be achieved.
This paper aims to contribute to the international policy debate around profit shifting, tax avoidance and SSA’s revenue mobilization efforts in three ways. First, it examines the importance of mining, the role of multinational enterprises (MNEs), and mining revenue outcomes in SSA. Second, it assesses the magnitude of profit shifting in mining drawing on new macro level research, supplemented by case studies to illustrate the lived experience of tax avoidance in SSA mining. Third, the paper identifies tax policy reforms that could boost revenue mobilization in SSA.
In Imposing Standards, Martin Hearson shifts the focus of political rhetoric regarding international tax rules from tax havens and the Global North to the damaging impact of this regime on the Global South. Even when not exploited by tax dodgers, international tax standards place severe limits on the ability of developing countries to tax businesses, denying the Global South access to much-needed revenue. The international rules that allow tax avoidance by multinational corporations have dominated political debate about international tax in the United States and Europe, especially since the global financial crisis of 2007–2008. Hearson asks how developing countries willingly gave up their right to tax foreign companies, charting their assimilation into an OECD-led regime from the days of early independence to the present day. Based on interviews with treaty negotiators, policymakers and lobbyists, as well as observation at intergovernmental meetings, archival research, and fieldwork in Africa and Asia, Imposing Standards shows that capacity constraints and imperfect negotiation strategies in developing countries were exploited by capital-exporting states, shielding multinationals from taxation and depriving nations in the Global South of revenue they both need and deserve. Thanks to generous funding from the Gates Foundation, the ebook editions of this book are available as Open Access volumes from Cornell Open (cornellpress.cornell.edu/cornell-open) and other repositories.
“This collection of essays provides a wealth of information and analysis about the Philippine economy and the role of agriculture and economic policy in it. The Philippine experience has been quite different from the highly successful Asian economies, with a long period of low growth until the turn of the century and only then greater success. The authors cover not only the Philippine experience but also place it in its Asian context and that of developing countries more generally. They report on the lessons learned, both positive and negative, from the various economic policies that have been adopted, with regard to both agriculture and to economic inequality. Those interested in Philippine economic development, and Asian development more broadly, will find this an important reference work.”—Anne O. Krueger, Senior Research Professor, Johns Hopkins School of Advanced International Studies; 1st Deputy Managing Director, IMF (2001-6); Vice-President of Economics and Research, World Bank (1982-86)
This short introduction to issues of tax justice explains the meaning and causes of tax injustice and offers options for a better future. Providing insight into the specific failures of Africa s tax systemand the associated problems of capital flight, tax evasion, tax avoidance, and tax competitionthis book explores the role of governments, parliaments, and taxpayers, and asks how stakeholders can help achieve tax justice. Arguing that tax revenues are essential for establishing independent states of free citizens, it demonstrates how the tax consensus promoted by multilateral agencies, such as the World Bank and the International Monetary Fund, has influenced tax policy in Africa and led to a reduction in government revenues in many countries. "
FinTech is a major force shaping the structure of the financial industry in sub-Saharan Africa. New technologies are being developed and implemented in sub-Saharan Africa with the potential to change the competitive landscape in the financial industry. While it raises concerns on the emergence of vulnerabilities, FinTech challenges traditional structures and creates efficiency gains by opening up the financial services value chain. Today, FinTech is emerging as a technological enabler in the region, improving financial inclusion and serving as a catalyst for the emergence of innovations in other sectors, such as agriculture and infrastructure.
