How developing countries can take control over their tax destinies

Krishen Mehta, a Senior Adviser to TJN, has written a short document with ten pointers offering ways that developing countries can take control over their tax destinies. We reproduce the introduction of his article below: please click on the full article for the ten points. We hope to produce more of these in due course, in collaboration with other experts.

How Developing Countries can take Control of their own Tax Destinies

By Krishen Mehta

July, 2014 

Introduction:

The question of how developing countries get a fair deal on tax justice is an important and sensitive one. It goes to the heart of how a country can attract foreign direct investment and still not give up its fiscal sovereignty. It is also important to understand that the question of ethical tax practices by multinational companies (MNCs) is not an easy one.

I know first hand some of the complex issues that go into decision making by the MNCs. These include risk of capital expropriation, repatriation of profits being challenged, foreign exchange risk, how future governments could view existing contracts, reputational risk, customers’ responses, and so on. We cannot make an evil empire of the MNCs or their enablers. But what a developing country can do is to take control of its own tax destiny.

Allow me to point out ten ways this can be done.

Now read on.