| dc.contributor.author | Onyeabor, Emmanuel Tochukwu | |
| dc.date.accessioned | 2024-08-28T12:15:56Z | |
| dc.date.available | 2024-08-28T12:15:56Z | |
| dc.date.issued | 2024-08-27 | |
| dc.identifier.uri | http://hdl.handle.net/10222/84493 | |
| dc.description | The emergence of digital businesses has disrupted corporate income tax rules in international tax law and policy, which are based on taxable physical presence within a tax jurisdiction. Most digital businesses have limited or no physical presence in source countries, which limits or eliminates the source countries’ ability to tax them. They also utilize favourable tax regimes to design their activities in structures that allow them to pay little or no taxes on their global income. I argue that stakeholders recognize the need to establish new global rules for the allocation of taxing rights in a globalized and digitalized economy. The point of difference lies in the approach proposed by stakeholders towards achieving this required change. My thesis is that these proposals represent two unacceptable extremes: (i) global consensus, which is impracticable and favours wealthy host countries to the detriment of low-income source countries like Nigeria in terms of both process and substance; and (ii) unilateralism, which violates both existing bilateral tax treaties and the international tax principles of administrability and efficiency, thereby socio-politico-economically hurting developing and emerging economies much more than it helps them. I collectively refer to these as the “Digital Tax Extremes”. I examine the potential implications of the Digital Tax Extremes in terms of both process and substance – highlighting the relevant tax competition, international trade relations, tax justice, constitutional issues, and treaty commitment concerns raised for developing countries. Relying largely on the theories of neorealism in international relations and rational pragmatism, and drawing richly on the concepts of tax policy, reasonableness, and tax jurisdiction, I contend that African developing countries need to look beyond the Digital Tax Extremes if they wish to succeed in their digital tax drive. I consequently propose an alternative digital tax model for developing and emerging economies styled the “Onyeabor’s Digital Tax Model for Developing and Emerging Economies” (“ODTMDEE”). ODTMDEE is a three-phased digital tax model hinged on the rationales that: (a) African developing and emerging economies, as the underdogs of the international tax regime, cannot reasonably expect developed economies – who largely benefit from the status quo at Africa’s expense – to midwife any meaningful global digital tax consensus that will work in Africa’s favour; (b) the cold reality that African developing and emerging economies are separately incapable (socio-politico-economically) to drive and successfully implement unilateral digital tax measures; (c) international tax law and policy cannot be successfully divorced from international politics; and (d) African developing and emerging (source) economies can effectively achieve their digital tax objectives through “strategic reasonable political compromise” with developed (host) economies. To this end, ODTMDEE represents a “strategic reasonable political compromise” or block regional approach that seeks to effectively achieve Africa’s digital tax objectives in terms of both process and substance. ODTMDEE starts its phase one with Nigeria - as the “Giant of Africa”, expands to the Economic Community of West African States, moves up to the African Union, and ends at the steps of the United Nations (“UN”), with the aim of bringing the developed (host) economies (represented by the Organisation for Economic Cooperation and Development(“OECD”)) to the negotiating table. Phase two of ODTMDEE proposes a redrafting of existing OECD and UN Model Tax Treaties to recognize a special definition of “significant economic presence” for digital tax purposes as one of the tests for determining taxable presence of a non-resident entity within a contracting state under the Permanent Establishment (“PE”) rules specified in the treaties. Phase three of ODTMDEE proposes a reflection of the updated PE rules in relevant bilateral tax treaties with other countries such as Canada. I then show how the UN tax resolution of November 22, 2023, has paved a pathway to achieving phase one of ODTMDEE. I further show why the UN tax resolution of November 22, 2023, may not achieve Africa’s bid for increased participation in global tax policy formulation if ODTMDEE is not implemented. | en_US |
| dc.description.abstract | The emergence of digital businesses has disrupted corporate income tax rules in international tax law and policy, which are based on taxable physical presence within a jurisdiction. Digital businesses have little to no physical presence in source countries, which impedes the source countries’ ability to tax them. I argue that stakeholders recognize the need to establish new global rules for the allocation of taxing rights in a globalized and digitalized economy. The point of difference lies in the approaches proposed for achieving this required change. I argue that these proposals represent two unacceptable “digital tax extremes”: global consensus and unilateralism. Relying largely on the theories of neorealism in international relations and rational pragmatism, I contend that African developing countries need to look beyond the Digital Tax Extremes if they wish to succeed in their digital tax drive. I consequently propose an alternative digital tax model for developing and emerging economies. | en_US |
| dc.language.iso | en | en_US |
| dc.subject | unilateral digital taxes | en_US |
| dc.subject | international tax law and policy | en_US |
| dc.subject | developing and emerging economies | en_US |
| dc.subject | rational pragmatism | en_US |
| dc.subject | neorealism in international relations | en_US |
| dc.subject | Nigeria | en_US |
| dc.subject | digital tax extremes | en_US |
| dc.subject | tax policy | en_US |
| dc.subject | tax jurisdiction | en_US |
| dc.subject | strategic reasonable political compromise | en_US |
| dc.subject | Canada | en_US |
| dc.title | Analysis of Unilateral Digital Tax Measures in Developing and Emerging Economies Using Nigeria as a Case Study: Looking Beyond the "Digital Tax Extremes" in International Tax Law & Policy | en_US |
| dc.date.defence | 2024-08-21 | |
| dc.contributor.department | Faculty of Law | en_US |
| dc.contributor.degree | Master of Laws | en_US |
| dc.contributor.external-examiner | Not Applicable | en_US |
| dc.contributor.thesis-reader | Colin Jackson | en_US |
| dc.contributor.thesis-reader | Richard Devlin | en_US |
| dc.contributor.thesis-supervisor | Kimberley Brooks | en_US |
| dc.contributor.ethics-approval | Not Applicable | en_US |
| dc.contributor.manuscripts | Not Applicable | en_US |
| dc.contributor.copyright-release | Not Applicable | en_US |
