Expert Group Meeting on Tax Aspects of Domestic Resource Mobilization: A Discussion of Enduring and Emerging Issues

South Centre will be participating in the UN DESA/IFAD Ad Hoc Expert Group Meeting on Tax Aspects of Domestic Resource Mobilization: A Discussion of Enduring and Emerging Issues to be held in Rome on 4-5 September 2007. Dr. Yash Tandon, Executive Director, South Centre will deliver a presentation on "Taxation of private equity funds/investments in domestic jurisdictions" under Agenda 4 on "Trade and Investment-Tax aspects."

According to Dr. Tandon, this privilegization (sic!) of the global corporate sector (which, incidentally, is also the basis of privatization) is at the root of the trepidation (indeed, fear) that governments in the South experience in making bold policies to generate self-motivated economic development, and in creating bold tax regimes. There is all-pervasive apprehension, for example, that increasing tax rates would drive investments out, and that includes both domestic as well as foreign capital. This explains the timidity of much of tax regimes in the countries of the South.

What is required is a paradigm shift that provides a more balanced perspective on the “engines” of growth, so that the corporate or private sector, whist important and significant, does not enjoy a stranglehold over policy such that governments ignore, or downgrade, the role that other social forces and economic actors play in economic growth in the developing countries.