 Hello and welcome to this World Economic Forum discussion on a new global tax agenda. My name is Stephen Carroll. I'm a journalist at France 24 in Paris and we're here to discuss what may be a watershed moment in a year's long effort to try and reform the international taxation system and in particular how big companies are taxed. After what's been described as a 180 degree change in the United States position on the matter discussions are now advancing towards what could be a new global minimum corporate tax rate. In the context of the COVID-19 pandemic, this is a change that potentially could provide much needed revenue for governments who have collectively spent trillions on their response to the pandemic over the past year. But will this plan see the spoils go to the right places? Will it be shared equally? Will countries get their fair share? Or would this be a deal among rich countries that will leave behind developing economies? After decades of what's been called a race to the bottom in global taxation, how can international tax reform contribute to a more sustainable and equitable economic recovery to discuss this? We're joined today by Alicia Barsano, who's the Executive Secretary of the Economic Commission for Latin America and the Caribbean of the United Nations. Alicia, thank you very much for being with us. Alex Cobham is with us, too. He's the Chief Executive of the Tax Justice Network. This is a 30 minute discussion just under now. We're going to start by speaking to our participants, but we'll have time for your questions in just about 20 minutes time. So please do submit them through the Zoom chat and we'll try and get to them all before the end of this as well. Of course, you can react if you're watching us on social media. You can react using the hashtag jobs reset 21 and of course via top link as well. So welcome, first of all, to Alex and to Alicia. Thank you very much for being with us. Alex, I'd like to start with you. We have an important meeting this weekend. Well, this Friday, G7 Finance Ministers are meeting. They're going to be talking about this topic. We have had lots of indication in the past few weeks that we might finally be reaching some sort of movement on this. Are you hopeful? Are we at this watershed moment for international tax reform? I think we're very nearly there. We may not get numbers from the finance ministers. We may not even get them from the heads of state meeting in Cornwall the week after. But I think we'll certainly have detailed by the time of the G20 meeting in July. And really what the G7 decide now is what the OECD will take forward. So I think one thing is what the public statement that comes out. Another thing is what's actually determined. And that's really about what rates they're going to set as a global minimum corporate tax rate. Fifteen percent would be a step forward. It would still, we think, bring in more than $250 billion of new revenues. And that would make it the biggest change in 100 years of international tax rules. If they go to 21 percent or even better to 25 percent, we're talking five, six, 700 billion dollars, the sort of money that when you're thinking about perhaps 50 billion needed for COVAX or the amounts to invest in public health systems in lower income countries. Suddenly, this is really game changing. But the question that's left apart from the rate is who's going to get the benefit of this? Under the OECD proposals, the G7 countries themselves would get about 60 percent of those additional revenues, and that doesn't leave much for anyone else. There are fairways and we've proposed one of them. If they go forward with one of these fairways, I think this could really be the biggest shift in the global inequalities in taxing rights for a generation. And it would set the basis for building back better in a really genuine way. If instead they just look after themselves, I think we're going to see this issue comes the United Nations pretty quickly in the search for something fairer that really represents the interest of people all around the world, not just the 10 percent of the world's population who happen to live in the G7 economies. Thanks, Alex. That's a really good reminder. This has been a very long process to get us to where we are now, where potentially we have, in fact, some developments on the way. Alicia, I'd like to turn to you next. What are your hopes in this process in particular? We'll talk more broadly about the issue in a moment, but where we are now coming up to that G7 meeting, does this have the potential impact for Latin American countries and Caribbean countries that you'd be hoping for? Well, I think we have to address this issue from different perspectives as well, because I think, as Alex very well said, I mean, we are, of course, in favor of this global tax. There's no question about it. We are very much in favor. We hope it gets through. The problem is if this tax is going to be a one-time tax, or is it, as they say, it's going to be like a solidarity tax. They are calling it that it's going to go for buying vaccines. Now, who are the suppliers of vaccines? Hello are the North, right? So what is going to be the benefit for Latin America and the Caribbean, for example, or developing countries is not that clear. I have to say that today we are facing the worst situation. We have islands of immunity in the world in this region. We have a very great disparity in terms of access to vaccines. So if that money is going to go to buy vaccines, and the next step is how are they going to be redistributed? Are they going to be sale? So do the countries are going to be donated? What are going to be the criteria? Because COVAX is only is only going to be able to give 20% of those vaccines. So that's number one. And we do agree, of course, of these tax, no question about it. But there's other elements that I think need to be agreed upon in a in global agreements and in a global tax system that really could contribute to a to a transformation of the global economy. And I have to say that, first of all, I think that the most important thing for a region like ours is tax evasion. And that is tax evasion amounts to 6.1% of GDP. We're talking a lot of money there. And where does this money go and how do we regulate this money? So that's number one. We really need to go beyond, of course, as I tell you, I'm totally in favor of this global tax on corporate earnings, no question. But number two, we have to go to work to the tax evasion. And this is connected to tax-based erosion. And I do agree that BEPS, OECD has done a lot of work, but we have to go beyond because we need those taxes or those revenues. Let me put it that way, maybe we need those taxes or those where the where the gains of productivity are being made. And here, for example, we need a global alliance with the extractive industries and the World Economic Forum has been working on that a lot. But we need really to agree on a flat tax, if you wish, on certain commodities cannot be this disparity and the race to the bottom, as you said at the beginning, because what happens is that the big companies go to small countries, negotiate the best terms and they raise to the bottom the whole business. So we need to work on corporate tax, the taxation on the reform of international corporate taxation and really to go up to 25% worldwide. I hope and stop base erosion and profit shifting. I think this is extremely important. I really hope that the G7 will will address these issues carefully. And finally, the SDRs, I really hope that the G7, I mean, I know it's not totally related to taxing, but it is because what our countries do need today is liquidity. And we need we don't need very high cost liquidity. Middle income countries, which is the majority, by the way, with holding the highest levels of debt in the world, we need access to liquidity in better terms. SDR is an option. We need to we we need urgently the G7 to say yes and go ahead and reallocate the SDRs as soon as possible. And finally, I think the high, the other question that I hope will come from the public is we need a debt reduction strategy, a debt reduction that is not one size fits all. We need to take into account the toolbox of innovative instruments. I think the IMF is doing a great job, frankly. I think Cristalina Georgieva is really thinking differently out of the box to bring in, for example, a climate action as part of the debt swaps in the negotiations of debt, which I think is very innovative and very important for a greener building back forward, not even better, but forward, not backwards. Thank you so much. Thank you, Alicia, for bringing in. So so many of the other strands that are, of course, all around this issue and this this issue of tax that we're talking about today, because, of course, vaccines and, as you say, those issues around debt and the special drawing rights, the IMF are all interrelated into how we recover from this crisis. Lisa, I want to ask you that this is a discussion that's been centred at the OECD, which is, you know, a club that represents tends to represent the richer economies in the world. Is do you feel that those countries, those less developed economies are being sufficiently heard in this discussion about reform of global corporate tax? Do they have sufficient voice in those discussions to make sure that whatever is decided on will be fair? I think it's a great question. I think no, I think that that's why we need a reform on the tax on the multilateral tax debates. It's not enough what's happening in OECD. It's very important. I have to admit that Angel Goree and his team did a great job, by the way, he's leaving yesterday was his last day. But I mean, they did a fantastic job and Pascal did a fantastic job on BEPS, but it's not enough. We need to go a step further. We really need to get the developing countries voices in and the emerging economies. I mean, we're not only talking about the least developed, we're talking about very large economies that need to be heard. There is a place in OECD, which is the OECD Development Center. But I do believe that we need a tax reform and international tax discussion debate in the United Nations. And that is what Antonio Guterres is trying with the Prime Minister of Jamaica and Canada, that is to bring about the voices. For example, those voices that are never heard are the small island developing states, for example. I mean, and these guys are really drowning, not only because of the climate change, but also because the external debt and the high vulnerability. So definitely we need a space where tax discussion takes place and that could be the UN. I really believe so. The tax committee has to be upgraded and become a ministerial tax committee. Where the G20, by the way, comes along. I think this is very important. Alex, as someone who's been following this process for such a long time, do you have confidence in where the direction of travel is now that we're getting to where we've gotten through this OECD process? The draft communicate that's being reported ahead of Friday's meeting makes reference to the OECD process for taxation. Do you think that's where we're likely to end up and will that produce the desired results? So I think we'll end up with an OECD agreement within the next few months. And I think it will be a dramatic step forward. But I'm afraid everything that we've seen so far from the OECD suggests that they will continue with the current proposal for how this will be structured. So it will be an annual additional revenue of very significant amounts, making sure the largest multinationals are paying a minimum effective tax rate. But the majority of those revenues will go to the OECD countries and the G7 countries themselves. We know that lower income countries lose a bigger share of their current tax revenues to corporate tax abuse. And yet we're moving forward with a structure of a proposal from the OECD that would give them the least benefit. So I think even though this will be a step forward and normalizing the idea of a minimum tax rate is very important, I don't think this is going to be anything like the final answer to the question. We're going to see the pressure that's already been growing. You know, Alicia mentioned the Antonio Gutierrez process with Jamaica and Canada. That's already surfaced the idea of a UN tax convention and the high level facti panel has recommended that very strongly. I think we might see Antonio Gutierrez in September bring forward a proposal to start negotiations on a UN tax convention, which would be the basis for that intergovernmental body to set tax rules under UN auspices, which I think is increasingly where the consensus is. The OECD has had it short. It's opportunity to show that it could deliver for everyone unless something really dramatically shifts in the next month or so. I think that's gone. And I think we're looking now to the UN to fix this. Is there a chance that this will come an incremental step that we won't get into minimum taxation, as you say, is such a big step? But is it a step that we're going to be able to build on then through, for example, the likes of a UN process afterwards? Do we need to follow through this process to the end to get ourselves on that road? That's an interesting question. I think in terms of establishing the idea of a minimum tax rate that multinational companies should pay some minimum level that's not so far away from what a smaller domestic business pays, I think this process has been very important to normalise that idea. But at the moment, the OECD proposals would give the entire privilege to collect that revenue to the headquarters countries of multinationals. That's overwhelmingly the G7 and other OECD members ahead of the host countries, which is where most lower income countries find themselves hosting these multinationals, not being their headquarters. Our alternative proposal would say, let's take the under tax profit and let's apportion it without this discrimination between headquarters and host countries, instead just according to where the real activity takes place. Where do these multinationals have their sales and their employment? And if you do that, unsurprisingly, you get a much fairer outcome. It's not perfect, but it starts to reduce these global inequalities in taxing rights, and it will allow lower income countries to make the kind of sustained investment in public health systems that they need. Charity from the G7 through COVAX may be necessary right now, but it's necessary right now because the G7 and others in the OECD have undermined international tax systems for so long to the detriment of lower income countries. So let's fix that too for the longer term, because that's really what we need if everyone's going to have the kind of public services and the human rights ultimately that we want them to. Elisa, one of the questions that's come from one of our viewers is whether or not you think that this process, this minimum corporate tax could pave the way for other kinds of international taxation, maybe agreements on the global carbon tax. Would you have hoped that we could be moving in that direction? Definitely yes, but let me get a step backwards for a little moment because I believe that this process of taxation, I mean of corporate corporations coming in, and I want to underline what Alex just said, because I really believe that we need a system that is much more, I would say inclusive in a way that these corporations not only pay in the countries of their own jurisdiction, but in the countries where they are making the gains, the productivity gains. We are living under a world of great discontent, and I tell you something, the corporations need to understand that inequality conspires against their business, and they're not going to get it if we don't make it much fairer. I mean, look what's happening in Colombia and Chile everywhere. I mean, people are very tired. Now, the second thing you're asking, whether there is a space for other global taxes like the carbon tax, I think this is very important. I think there is space for that, but the first thing we need to understand is where are the subsidies on their energy? Are the energy subsidies in the developing world? I don't think so. So if we're going to go for a carbon tax, let's make sure that we design a system that again is not going to be discriminating against the developing countries. I think this is extremely important because these countries are looking for industrialization, of course, carbon-free, but you know that it's very expensive. Now, how to use the revenues of these taxes? Let me put an example. Are the corporations in the world ready to share patents for carbon-free technologies? Are they ready for that? Because that could be a very good global deal. If we put together, yes, a carbon tax, indeed, but then why don't we use some of these revenues for patents for the developing worlds on carbon-free technologies? I think this is very important. And then the last discussion I think we need to undertake is are we ready for property taxes, I think, and wealth taxes in our region? We are looking for that. I think we are not only looking for income taxes, that's good, but also for wealth taxes and that's something that if the world starts talking about that, maybe our countries will also develop those fiscal system. And just as an example, Mexico, where I am now, has made, you know, they say that Mexico is not doing any fiscal reform. Mind you, they are doing a very important fiscal reform. They are avoiding tax evasion and they are obtaining revenues last year of 1.7% of GDP. Very amazing. For me, that is a fiscal reform included. So over to you, Stephen. Sorry that I covered so many topics. No, I mean, it's all very interesting and it shows us again how connected all of these topics are. Alex, on that point, do you feel that have we learned something from this process that will allow us to build into other global agreements afterwards like, you know, carbon tax or other issues as well? Have we actually learned from this process how we could work together? So I think one thing we've learned is that the rich countries of the world will move when they face revenue pressure, but not necessarily in a way that benefits anyone else. And that's why, you know, to go back to this point, we have to get this into the UN system. You know, my colleague at the Global Alliance for Tax Justice, Derijay Alameyahu always says, if we're not at the table, then we're on the menu. And I think that's the experience of lower income countries far too often when we deal with international tax. At least he makes a really good point about a carbon tax. The idea of changing the incentives around carbon emissions is very important, and doing that on a worldwide level seems crucial, but if the effect of that is that we penalize lower income countries who are responsible for a much smaller share of the historic total of carbon emissions and also are less well-equipped to bear those costs today, in doing so, it will be fundamentally unjust. And the idea that we can fix the climate damage that the rich countries have done off the backs of the lower income countries seems unconscionable, and yet it's not at all unlikely that that kind of proposal would come through if we continue to let the OECDs set the rules for everyone else. Ultimately, it comes down to the politics of this. We can make the changes we want. We can ensure tax sovereignty in countries at every income level, but only by pulling that sovereignty, by cooperating in a way that is globally inclusive. These issues of tax evasion, also that Alicia mentioned, tax evasion and corporate tax abuse, the numbers show absolutely without doubt that the OECD countries and their dependent territories are responsible for about two-thirds up to almost 100% of the global problem, depending on how you cut that data. This is an issue driven by the rich countries that the rich countries benefit from, extracting income and the ability to tax from lower income countries. Until we understand that element of the politics, then the technical discussions will always end up taking us back to the same place, back to unequal proposals that favor the rich countries over lower income countries. Let's get this to the United Nations. Let's have the transparency and the globally inclusive nature that only the UN can deliver to intergovernmental negotiations and then we'll start to see the kind of tax changes that will really benefit everyone. Another question that's come in from our viewers, Alex, so do you think the EU will move forward with its proposed digital levy because we know so much of the conversation and Europe has been focused on taxing digital giants? Do you think it will move ahead with its digital levy despite what's happening with the G20 and the G7? The European Commission certainly sound like they're serious about doing that, and the fact that on the other pillar of the OECD reforms, the US proposals actually narrow it down, so there's only going to be a handful of digital companies covered by that, I think leaves the door open for the European Commission. Now, they'll have a fight about whether, if they agree with the OECD reforms, that's them committing not to do another digital type of tax, but I think the European Commission is big enough to say that we need to make sure that all of the big digital multinationals are captured by this, our citizens demand it, and also we'd quite like their revenues. So I think the incentives for them to move ahead with that will be quite strong, unless perhaps there's a really ambitious minimum tax rate agreed, in which case you'd find all of those multinationals were already paying a reasonably fair share of tax, something like 25% as a floor, I think would probably take that off the table for the European Commission, but I suspect we're going to see the UK and others pushing the ambition down probably towards 15%, in which case there's still a serious issue of the under taxation of those digital multinationals, which of course continue to out-compete local businesses with that unfair tax advantage, so there's a lot of reasons really to push ahead with that kind of change. I'm glad that you covered the issue of the rate because that's one of the big debates that we're expected to hear more about over the next few days. So you're thinking we're worth the UK and is going to push towards 15, but you'd like to see it much higher than that, so I'm glad you covered that. Elise, I want to come back to you as we're coming towards the end of our discussions here. One of the other issues that's related to this is the idea of creating a more level playing field for countries to compete. As we emerge from this crisis, are you hopeful that tax could be a lever in that to allow countries to compete in Latin America and the Caribbean to compete with other countries in different parts of the world? Well, before talking about competition, we need to talk about getting out of this emergency and how are we going to get out of this emergency? That's going to be crucial. And I think that the problem is that the level playing field is very uneven. Let's put it that way in many ways, because first of all, the countries and tax is going to be so important because there's a budgetary expansion that is going to be needed at least for this year, next year, probably 2023. That is, fiscal policies have shown us, by the way, that there was room for fiscal policies. Many people were on the fiscal contraction side, but now the world has demonstrated that there is fiscal space, by the way. If you want to find it, you found it. So the thing is here that, yes, I think that there is a there is a there, for example, in our region, these countries have invested around 4.1% of GDP, 4.3% of GDP in fiscal measures that are not enough, by the way, and they have to sustain this. So fiscal reform is essential. What type of reforms? Yes, income taxes need to go higher. The average of this region is 18% is not enough. We need to go up, OECD is around 34, so we definitely need to do that. Tax evasion, we need to control that. Tax expenditures, those are the privileges that are legal, what we have to review. Those tax expenditures, very carefully. And indeed, on this digital taxing, I think that in our region, it's so unfair what's going on. We have 45 million households without connectivity in this region. So those digital corporations need to make a solidarity expenditure to make sure that digital inclusion is there for everyone, if we really want to move forward. And finally, we have identified some key sectors for a better recovery. Energy transition is one, solutions based on nature, digital inclusion, electromobility, et cetera. So we are putting prices and costs to each one of these sectors to see how many jobs. Jobs is going to be the word. And that's why this World Economic Forum session is about jobs, because whatever we do, what we're going to need immediately is jobs. And who's going to provide those jobs? Is the private sector in it? I'm not sure. So we need fiscal paths, global fiscal paths, regional fiscal paths, and national fiscal compacts. Okay, Alicia Varsana from the UN Economic Commission for Latin America and the Caribbean. Thank you very much, Alex. Just a quick last word from you, if you don't mind. What is your hope? What time of the year should we be looking at that we're all going to be living in a brave new world of international taxation? Is it going to be done this year, do you think? Yep. I think the main decision will be July and we'll get the detail in October. But I hope by that time, we'll have a UN process moving to negotiate a tax convention that will really change the architecture as well. Okay, thank you very much, Alex Carbon Chief Executive of the Tax Justice Network for joining us. Thank you to all of you for joining us on top link and on the social media of the World Economic Forum. You can continue to react using the hashtag on social media jobs reset 21 and on top link as well. Thank you all very much for joining us and enjoy the rest of your evening.