June 26, 2023
U.N. Revisits The International Tax Architecture
Forbes Money Taxes U.N. Revisits The International Tax Architecture Nana Ama Sarfo Contributor Tax Notes Contributor Group Opinions expressed by Forbes Contributors are their own. Following Jun 26, 2023, 09:28am EDT | Press play to listen to this article! Got it! Share to Facebook Share to Twitter Share to Linkedin UN Secretary-General Antonio Guterres gestures during a press conference on a hosts aid conference ... [+] on Afghanistan, in Geneva on September 13, 2021. (Photo by Fabrice COFFRINI / AFP) (Photo by FABRICE COFFRINI/AFP via Getty Images) AFP via Getty Images U.N. Secretary-General António Guterres is expected to release a much-anticipated report on international tax cooperation within a few weeks. As the international tax community waits — and speculates — on what that report might say, the secretary-general recently offered a small hint. At the end of May he released a report calling for a new international financial architecture underpinned by sustainable development goals. That report, “ Our Common Agenda Policy Brief 6: Reforms to the International Financial Architecture ,” argues that the international financial architecture is in a decisively weak moment: “The international financial architecture, crafted in 1945 after the Second World War, is undergoing a stress test of historic proportions — and it is failing the test.” How can the system get back on track? The U.N. thinks the international system needs reform in six key areas. One of them is international tax. And in this area, the policy brief offers some suggestions that could support and reshape ongoing international tax reforms and initiatives. The U.N.’s Case for Reform Nearly 80 years ago, delegates from 44 countries convened at Bretton Woods, New Hampshire, where they developed a new international monetary system. That meeting, the Bretton Woods Conference, laid out a framework for global financial stability after World War II. In the decades since, the international policymaking environment has become starkly different, and the U.N. secretary-general points out that there are many more global players now. For example, the World Bank and IMF each have about 190 members, more than quadruple the number of countries involved in Bretton Woods. MORE FOR YOU New Apple Leak Reveals iPhone 15 Price Shock ‘Open The Floodgates’—Crypto Suddenly Braced For Volatility Amid $100 Billion Bitcoin And Ethereum Price Boom AEW X NJPW Forbidden Door 2023 Results: Winners And Grades On June 25, 2023 Over the years, policymakers have talked about revisiting this international agreement, and they became particularly serious during the 2007-2008 global financial crisis. European lawmakers largely saw the events as an opportunity for a new kind of Bretton Woods agreement, a “new global financial order.” At the time, French President Nicolas Sarkozy and U.K. Prime Minister Gordon Brown led the campaign for this international financial reform. Based on their canvassing, the G-20 in 2009 promised it would completely reform global financial institutions and update their scope, governance, and mandates. The secretary-general says those beginnings were promising, but underwhelming, especially because developing country representation in international financial institutions, regional development banks, and standard setting bodies has remained low despite several attempts at improvement. In the tax realm, the secretary-general’s main goal is to redesign the global tax architecture in a manner that promotes equitable and inclusive sustainable development. In the report, he mentions three relevant action items that could help drive this change. Reimagining Tax Cooperation The first item, action 15, is about “strengthen[ing] global tax norms to address digitalization and globalization through an inclusive process, in ways that meet the needs and capacities of developing countries and other stakeholders.” Here, the secretary-general lists two goals: explore options to make international tax cooperation fully inclusive and more effective; and simplify global tax rules to benefit developing country tax administrations that do not have enough resources. More details are expected in the secretary-general’s upcoming report, which he is writing in response to a recent demand that the U.N. reevaluate its role in international tax cooperation and consider the possibility of creating a U.N. framework on international tax cooperation. This effort on international tax cooperation feels more robust than previous ones. And the U.N. is beginning to pick up some surprise supporters. Notably, the European Parliament recently signaled its approval in a resolution calling on the EU to support a U.N. tax cooperation framework. European Union flags in front of the blurred European Parliament in Brussels, Belgium getty This move is unexpected because the EU delegation to the United Nations believes the U.N. should support the OECD’s work rather than embark on potentially duplicative endeavors. However, the EP resolution noted that there have been repeated calls for a greater U.N. presence in international tax. For example, in 2019 the Africa Group at the United Nations called for a U.N. convention on tax as an important tool for tackling illicit financial flows, and in February 2021 the U.N. High Level Panel on International Financial Accountability, Transparency and Integrity also suggested a U.N. tax convention in its final report . The EP’s language is unequivocal in that it: “calls for the EU to support the setting up of a UN framework convention on tax, with the aim of strengthening international cooperation and governance on tax and trade-related illicit financial flows; [and] highlights the need to introduce transparent and inclusive decision-making where all countries can negotiate as equals.” A Pillar 2 for Developing Countries The second item, action 16, is all about pillar 2. The secretary-general says that pillar 2 can be improved to reduce wasteful tax incentives and encourage taxation in source countries through one main goal, which is to: “Significantly increase the global minimum corporate income tax rate to be close to the statutory tax rates in most developing countries and give preference to source country taxation.” While the U.N. welcomes a global minimum corporate income tax, it also believes that “the minimum is likely to become a maximum due to tax competition.” “Developing countries have repeatedly called for setting the global minimum tax rate at a significantly higher level that is more in line with statutory tax rates prevailing in their countries. The agreement needs to give first priority to source country taxation and include stronger rules to eliminate tax base erosion,” the brief says. The brief doesn’t elaborate on what it means to prioritize source country taxation rights under pillar 2, but this will be an important area to watch. The global anti-base-erosion (GLOBE) rules contain two main parts — first, the income inclusion rule, under which a top-up tax is first applied at the level of the ultimate parent entity, proportional to its ownership interests in the group entities with low-taxed income, then applied down the ownership chain. The UTPR (formerly known as the undertaxed payments rule) works as a backstop to the IIR by denying a deduction or by imposing source-based taxation for a payment to a related party that’s not subject to tax at, or above, the minimum rate. However, the GLOBE rules contain an important provision for source countries — they allow jurisdictions to apply a qualified domestic minimum top-up tax (QDMTT) on income earned within their borders, effectively giving source countries a first taxing right over GLOBE income. A QDMTT isn’t a mandatory part of pillar 2, but the order of application encourages source countries to implement one because a QDMTT (if set high enough) will cancel out the IIR by reducing the residence country’s top-up tax to nothing, according to the OECD. However, jurisdictions won’t experience a competitive disadvantage in implementing a QDMTT because another country will tax the income via the IIR or UTPR if the source country chooses to forgo the opportunity. Further prioritizing source country taxation rights could look like encouraging source countries to enact QDMTTs, which some groups, such as the African Tax Administration Forum, are already doing. It also could look like lobbying for further negotiations on the pillar 2 rule order. Low angle view of futuristic modern architecture, Skyscraper of corporate office building, Curve ... [+] shape, 3D rendering. getty As for the minimum tax rate, 15 percent is pillar 2’s floor, but it’s unclear whether countries could band together and create their own regional minimum rate. While such regional approaches are infrequent, there is some precedent for this; for example, in Africa both the West African Economic and Monetary Union and Communauté Economique et Monétaire de l’Afrique Centrale set a 25 percent minimum corporate income tax rate for their member countries. Establishing a higher rate for domestic minimum top-up taxes (DMTTs) may be possible. In administrative guidance , the OECD said that a QDMTT rate must equal or exceed the 15 percent minimum rate, so the OECD is already anticipating that countries may choose to apply higher rates. Doing so could partially fulfill the U.N.’s aims because developing countries — which generally are not home to the large multinationals subject to GLOBE — are unlikely to implement the IIR. As for the UTPR, there has been speculation as to whether countries can unilaterally increase their UTPR rate, but the rate issue may not be as flexible as it is in the case of DMTTs. In the pillar 2 blueprint the OECD stated that the application of the UTPR will likely have to be coordinated across jurisdictions to ensure that top-up taxes applied to a multinational do not exceed the amount necessary to reach the 15 percent minimum rate. Boosting Tax Transparency The last tax agenda point, action 17, is about tax transparency. The secretary-general wants to achieve two main goals: create nonreciprocal tax information exchange mechanisms to benefit developing countries; and publish beneficial ownership information for all legal vehicles. This kind of work is already being done by the OECD and the Financial Action Task Force, but the secretary-general’s goals would advance that work in new directions. On the issue of information exchange, the brief calls on the international community to create mechanisms that would automatically provide banking and financial account information to developing countries on a nonreciprocal basis until they can exchange information reciprocally. As things stand, some developing countries participate in the automatic exchange of information reciprocally, and others on a nonreciprocal basis, which means that they can share information but cannot request it because of confidentiality, data privacy, and infrastructure concerns. Some stakeholders have argued that this arrangement prevents developing countries from accessing information they need to tackle illicit financial flows. The policy brief also supports the wider use of treaty-exchanged tax information to help prosecute nontax financial crimes. Specifically, the U.N. says that international agreements should be amended to support that kind of exchange but doesn’t elaborate on how that can be done. Further information on this will be key because there already are domestic and international frameworks that allow for this wider use. It appears that the issues surrounding the wider use of treaty-exchanged information are more about education and implementation than legal access. The policy brief also calls for public beneficial ownership systems that have broad coverage and automated verification of information. This could help advance the conversation as more countries develop beneficial ownership registers or refine existing ones. Past vs. Present This isn’t the first time the U.N. has talked about building a new global financial architecture, but it is the first time that the organization has substantially incorporated taxation into that conversation. In 1999 a U.N. task force released a report discussing ways to build a new international financial architecture. That report, “ Towards a New International Financial Architecture ,” presented the U.N. secretariat’s unified position on economic, social, and related issues. It was created in response to the global financial crisis of the late 1990s and addressed how global stakeholders can prevent and manage financial crises. Taxation appeared only briefly in that report. In one section, the task force called for fiscal, monetary, and financial international codes of conduct to enhance corporate governance and financial transparency to improve accounting standards as well as financial supervision and regulation. The report suggested that international anti-money-laundering and anti-asset-laundering standards and anti-corruption and anti-tax-evasion measures were necessary. In another section, the report discussed taxation in the context of capital inflows and outflows, suggesting that developing countries create tax strategies to manage those flows in times of crisis. The U.N. revisited the idea in its “ World Economic and Social Survey 2010 ,” which devoted a whole chapter to reforming the international financial architecture. There, tax featured more prominently, as the book discussed the need to end the race to the bottom on tax competition and ways to enhance international tax cooperation. The chapter made two main points. One was that countries should not undermine the tax and regulatory stances of their peers. The other was that the international community needed strengthened information exchange and cooperative enforcement: “Undertaking this task within a broader framework than that possible under the auspices of the [OECD] will thus be critical. This need is already being realized through the coordination of financial regulation spearheaded by the G-20. It will be necessary to widen the scope of multilateral tax cooperation along the same lines, which might require greater reliance on the framework provided by the United Nations.” That greater reliance on a U.N. framework didn’t quite materialize, at least not in the way that developing countries had hoped. However, this time around, the U.N. is offering some actionable ideas on how to improve the international tax framework, which makes this effort feel like it may have a lasting impact. However, the proof will be in the details, and the world is waiting. Nana Ama Sarfo Editorial Standards Print Reprints & Permissions
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Star Wars Director Says It's About Time A Woman Makes A Star Wars Movie
Jan 02, 2024
Oscar-winning documentary filmmaker Sharmeed Obaid-Chinoy is directing an upcoming Star Wars movie that brings back Daisy Ridley in the role of Rey. Obaid-Chinoy will become the first woman to direct a Star Wars film, dating back to the franchise's origins in the 1970s. Speaking about this, Obaid-Chinoy told CNN that she is "very thrilled" to make the movie and create something that is "very special.""We're in 2024 now, and I think it's about time we had a woman come forward to shape the story in a galaxy far, far away," she said.Obaid-Chinoy won Best Documentary, Short Subjects Academy Awards for Saving Face (2012) and A Girl in the River: The Price of Forgiveness (2015).In 2020, Lucasfilm boss Kathleen Kennedy told the BBC that a woman would eventually direct a Star Wars movie, saying that would "absolutely" happen, "without question." Victoria Mahoney was a second unit director on The Rise of Skywalker, but a woman has never claimed a top directing credit on a Star Wars movie.On the TV side of things, The Mandalorian has featured a number of female directors, including Deborah Chow and Bryce Dallas Howard. Chow went on to direct the Obi-Wan TV series, too.Another high-profile franchise that has never had a female director is James Bond. Producer Barbara Broccoli and Skyfall director Sam Mendes have both said they want to see a woman direct a future 007 film.As for Obaid-Chinoy's Star Wars movie, little is known about it apart from the fact that Ridley will come back to play Rey. It is expected that this film will be the first of the three new Star Wars films to come to theaters, possibly releasing in December 2025.According to a report, Peaky Blinders creator Steven Knight is writing the Rey movie, taking over for Damon Lindelof and Justin Britt-Gibson.
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NBA Names Clare Akamanzi CEO Of NBA Africa
Jan 02, 2024 15:29
The NBA named Clare Akamanzi – an accomplished business executive and international trade and investment lawyer – as CEO of NBA Africa. Akamanzi will start her position on Jan. 23, 2024, and report to NBA Deputy Commissioner and Chief Operating Officer Mark Tatum. In this role, Akamanzi will oversee the NBA’s business and basketball development efforts in Africa and will be responsible for continuing to grow the popularity of basketball, the NBA and the Basketball Africa League (BAL) across the continent, including through grassroots basketball development, media distribution, corporate partnerships, and social responsibility initiatives that improve the livelihoods of African youth and families. For the last six and a half years, Akamanzi was CEO of Rwanda Development Board (RDB), where she spearheaded Rwanda’s economic development by enabling private sector growth. Under Akamanzi’s leadership, RDB implemented several business policy reforms and initiatives that led to significant investment and development for the country, including through partnerships with the BAL, Arsenal FC, Paris Saint-Germain FC, FC Bayern Munich and TIME Magazine, among others. “Clare’s business acumen, international experience and familiarity with basketball and the NBA make her the ideal executive to lead our business in Africa,” says Tatum. “NBA Africa and the Basketball Africa League are well-positioned for continued growth, and under Clare’s leadership we believe these initiatives will transform economies, communities and lives across the continent.” “I’ve seen firsthand how sports can positively impact businesses, families and communities in Africa, and the NBA and the BAL are a perfect example of that,” says Akamanzi. “The NBA has done an incredible job growing basketball and the economy around it across the continent, and I’m excited about the enormous opportunities ahead to build on that momentum.” Previously, Akamanzi was Chief Operating Officer of RDB and Head of Strategy and Policy Unit, Office of the President of the Republic of Rwanda. She has extensive international trade, business and diplomatic experience, having previously worked for the Rwandan Government at the World Trade Organization in Geneva, Switzerland and at the Rwandan Embassy in London, England. Akamanzi has worked or studied in seven different countries and holds an honorary LLD from Concordia University in Montreal, Canada, in recognition of her work in Rwanda. She earned a master’s degree in public administration from Harvard University’s Kennedy School of Government in Cambridge, Massachusetts, where she was the recipient of three prestigious awards for academic excellence and distinguished contribution to the community: the Lucius N. Littauer Fellows Award, the Raymond & Josephine Vernon Award and the Robert Kennedy Public Service Award. In addition, Akamanzi holds a Master of Laws degree in international trade and investments from the University of Pretoria in South Africa, and a Bachelor of Laws degree from Makerere University in Kampala, Uganda. Akamanzi has served on several company boards, including the World Health Organization (WHO) Foundation, ECOBANK and Aviation, Travel and Logistics (ATL) company. She was recognized by Forbes as one of Africa’s Top 50 Powerful Women in 2020.
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