FG Seeks Collaborative Efforts in Addressing Skewed Int’l Tax Rules

Harmonisation of tax systems will plug revenue leakages, says Nami

The Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed yesterday called on the Commonwealth Association of Tax Administrators (CATA) to join forces with Nigeria in insisting that the skewed international tax rules be straightened for the good of all.

The minister insisted that the current international tax rules were skewed against some countries, particularly developing nations, including Nigeria.

Speaking at the opening of the 42nd Annual Technical Conference of the Commonwealth Association of Tax Administrators (CATA) with the theme: “Tax Administration in the Digital Era,” in Abuja, the minister stressed that taxation was a matter of domestic law, pointing out that disputes arising from the interpretation of domestic legislation should only be resolved within those domestic legislations and by people properly schooled to interpret them.

Ahmed said Nigeria was committed to working with other jurisdictions and international bodies to achieve a win-win solution in the contentious matter.

She said, “Painfully, the skewness in the current international tax rules is again influencing the two-pillar solution of the Inclusive Framework.

“We have observed, for instance, that “Amount A” profit meant for market jurisdictions is progressively being chipped away in favour of jurisdictions where the multinationals are resident.

“Another example of skewness of the ‘Amount A’, rules are the requirement for jurisdictions to surrender domestic tax disputes to the mandatory and binding ruling of an arbitration panel composed and sitting outside the legal system of the respective jurisdictions.

She said the “discussion to change the rules must start now; the world must rework the profit allocation rules used for transfer pricing and the sharing of taxing rights by tax treaty partners.

“Nigeria is of the view that CATA is that organisation that is best placed to start this dialogue. Nigeria is committed to working with other jurisdictions and international bodies to achieve a win-win solution.

“The ‘Amount A’ proposal being developed by the Inclusive Framework is not achieving consensus because it is founded on win-lose principles. Only rules that promote a win-win situation can achieve the support of all.”