We, civil society activists, journalists, economists and researchers from North African countries, gathered on 24 and 25 November 2022 in Tunis for a meeting organized by the Tunisian Observatory of Economy and Tax Justice Network Africa, in the presence of allies for tax justice from across Africa, call for a fair, participatory and inclusive international tax reform.
This call is based first of all on the failure of international tax policies, which have not responded to the challenges of tax evasion and illicit financial flows that hinder the mobilization of resources necessary for financing development in our countries.
While comprehensive tax reforms are now necessary, the threats currently posed by the reform project promoted within the framework of the OECD are nevertheless real.
First of all, it must be noted that the negotiations of the "Global Tax Agreement" within the OECD, mandated by the G7 groups of rich countries, were neither inclusive nor transparent, in a context where the balance of power within the global financial architecture rarely favours the interests of the countries of the South.
Our meeting thus responded to a need for information on this agreement, which was supposed to enter into force on January 1, 2023 in some of our countries, while the evaluation of its benefits and impacts has not been the subject of any information or public debate at the national level. Delays in implementation and disagreements over the details of reforms at the international level have pushed back the timetable for a full agreement on the first pillar to mid-2023 and the implementation of the second pillar to 2024 at the earliest.
The entry into force of Pillar 2 in Europe is nevertheless already scheduled for December 2023, following the agreement at the end of 2022 of the twenty-seven countries of the European Union (EU) on the effective minimum taxation of 15% of the profits of multinationals, with the EU hoping to be followed by the United States, which has not yet made its decision.
Thus, beyond the complexity of the terms of this agreement, which poses a real challenge to its application by tax administrations, the general observation is that these provisions go against the interests of our countries.
The terms of Pillar 1 of this agreement are primarily in the interest of the wealthy states where the e-commerce multinationals are based by making it very difficult to tax their profits beyond these countries. Once this agreement comes into force, the countries that sign it will give up their taxing rights, no longer being able to tax the profits from this digital economy in their territory.
On the other hand, this global tax agreement aims through its Pillar 2 to impose a minimum effective tax rate of 15% on the income of multinationals to put an end to tax competition. Beyond a tax rate contested by the countries of the South, which have advocated to raise this rate to 20 or 25%, this pillar could be a real danger for countries with an effective tax rate below 15% because it will imply in this case a loss of tax revenues to the benefit of the rich countries where the multinationals concerned by this minimum tax are based.
Our meeting thus made it possible to overcome the technical straitjacket of international taxation, which always delays a common response to essential political questions. It was also an opportunity to connect the national, regional and continental levels to build this response and a common agenda.
For the attention of North African countries, the various actors present in Tunis:
Emphasize the importance of comprehensive tax reforms to fight against illicit financial flows that currently reduce the domestic revenues of African countries necessary for development and the realization of human rights.
Alert against the neo-colonial dimension of the reform defined, discussed and promoted by the OECD serving only the interests of developed countries, and call on North African countries to continue to refuse for Algeria and Libya, or withdraw from the global tax agreement for Mauritania, Morocco, Tunisia, and Egypt until their interests are guaranteed.
Call for the negotiation of a tax convention under the United Nations as an alternative to the OECD framework to ensure inclusiveness and the consideration of the interests of each country. In this regard, we call on the North African countries to support the African countries in the initiative of a resolution recently adopted at the United Nations General Assembly to establish a new space for discussion of international tax policies.
Call on North African countries to review their effective tax rates and to review their tax incentives by rationalizing them and making them conditional on development objectives
Call on North African countries to cooperate. At the regional level, tax competition between countries must be stopped because it leads to a race to the bottom and hinders development. On a global scale, it is urgent to form a common front to defend tax justice and sovereignty for our countries.
We call on all North African forces to join us in our commitment to strengthen the capacity of our countries to oppose regressive international tax reforms and to build and promote fairer international tax frameworks and conditions for our countries.
This involves:
Putting research at the service of the analysis of the stakes of this agreement in our countries, and at the service of the study of alternative policies and fiscal measures.
Promoting our recommendations to our decision-makers so that they commit to global reforms that are truly multilateral and beneficial to our countries, that they cooperate on regional tax reforms, and that they achieve tax justice in each of our countries.
To raise awareness among citizens and involve all stakeholders in mobilizing domestic revenue for the development and realization of human rights in our countries.
Joining and strengthening the TJNA network in North Africa, which is an asset to achieve the conditions of tax justice in our different countries, an opportunity to amplify our movement at the African level, and the guarantee that our struggles in Africa are defended at the global level.
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