Developing Countries

This article reviews the policy advancements on digital taxation, the individual initiatives that some developed countries have enacted, and considers some recommendations for developing countries to address future changes. It also contains a brief analysis of the Ecuadorian VAT reform for digital services and other possible options that need to be considered by the country.

Developed and developing countries have committed to implement global standards as developed by the OECD with the political mandate of the G20 including standards that provide for exchange of information among tax administrations. Some of  the reasons for this exchange to take place, is the need to provide tax administrations with the relevant information on taxpayer’s activities/assets abroad, as well as to ensure that taxpayers including multinationals pay their fair share of taxation. Exchange of information is the key instrument for tax administrations in order to prevent tax evasion, tax fraud, and aggressive tax planning.

Development, particularly in developing countries, in the current context requires thinking about how multiple global crises are interlinked, their impact on development prospects, and the narrative framing needed to generate positive and progressive systemic policy change.

Global value chains (GVCs), as a dominant form of capitalism today, have been a vehicle for entrenching the concentration of economic resources and power in the hands of multinational corporations. While COVID-19 compounded health and economic crisis, reports emerged that suppliers in the garment industry value chains have been facing mounting challenges as a result of unreasonable demands from big clients, mainly corporations in the United States and the United Kingdom.

The COVID-19 pandemic has exposed the weaknesses of the current patterns of production and consumption, exemplified by GVCs and the global trade and investment order in which they operate. These fragilities have resulted in the aforementioned social, economic and financial crises but what they represent most of all, is a crisis of responsibility in which powerful actors, state and private, that have been the main beneficiaries of GVCs, have failed to discharge their ethical and normative obligations to those most vulnerable within their production and supply chains. To this end, a new approach is sorely needed to address the vulnerabilities of a global economy built on fragile GVC governance that serves as new nodes of global inequality and precarity.

This online symposium is the outcome of a workshop on ‘GVCs, Trade and Development’ hosted by the Kent Law School and IEL collective in July 2020 and supported by the British Academy (Grant no. MD19\190020). The workshop engaged with the policy research literature produced by the World Trade Organisation and World Bank since 2013, in particular their Global Value Chain Development (GVCD) reports of 2017 and 2019.

The role of the international community in achieving adequate access to energy and reducing energy poverty, particularly at the regional level, is the central theme of Dr Victoria R Nalule’s book under this review.

The laws of the international trading regimes are crafted, not by Africans, but by economists and policymakers in the Global North, with the interest of the elites of the Global North at the heart of any prescriptions. That is why neoliberalism and the “free market” is sold as the panacea for Africa’s developmental impasse.

The most glaring gap in global economic governance is the lack of an orderly and fair sovereign debt restructuring arrangement.  Annamaria Viterbo’s new volume, Sovereign Debt Restructuring: the Role and Limits of Public International Law, helps us understand why this is so and how we might move forward. 

There is no doubt that solving this pandemic is the most pressing challenge of our time. This is not a zero sum game. Below, I elaborate on the four points for effective global solidarity to tackle the pandemic.