The President of Nigeria, Bola Tinubu, has urged for a prompt review of the global tax system. He emphasized the importance of this step in addressing imbalances within the international tax regime, with a particular focus on the needs of developing nations.
Tinubu made this call while delivering his address to fellow leaders at the third South Summit of the Group of 77 and China in Kampala, Uganda. The summit, themed “Leaving No One Behind,” centers around discussions on development and cooperation among developing countries.
“The current international tax systems, largely shaped by the interests of more affluent nations, often leave developing countries at a disadvantage, especially in taxing digital economies.
“This systemic imbalance has led to significant revenue losses, hampering our efforts towards sustainable development and economic self-reliance,” argued Tinubu, who was represented by the Minister of Budget and Economic Planning, Abubakar Bagudu.
Expressing Nigeria’s appreciation to all the countries that supported the global tax review initiative, President Tinubu said their solidarity reflects “our shared commitment to rectifying the inequities of the current tax system and fostering a more just economic order.”
He said this resolution marks a pivotal step towards establishing a more equitable and inclusive global tax system.
Tinubu’s call resonates with a longstanding concern among developing countries that existing tax systems favor richer nations by disproportionately allocating tax rights to the headquarters of multinational corporations, even when their products and services are consumed elsewhere. This phenomenon, particularly pronounced in the digital economy, can lead to developing countries losing out on potential revenue streams.
By advocating for a swift review, Tinubu highlights the growing urgency for a level playing field in the international tax landscape. This aligns with the summit’s broader theme of inclusive development, as a more equitable tax system could provide developing countries with much-needed resources to achieve their development goals.