There is a widespread consensus across multilateral and development institutions that “harmful tax competition” and the ensuing tax incentives to attract FDI are detrimental to enhancing Domestic Resource Mobilisation. However, it is less so recognised that Double Tax Agreements (DTAs) and investment agreements take place within the context of tax competition and include implicit and explicit elements of tax incentives. Revisiting existing investment treaties as well as DTAs and refraining from signing new ones which throw away tax concessions is key for developing countries to reduce forgone public revenue and enhance domestic resource mobilisation for their development.
In this session, 4 presentations will focus on highlighting the emergence, evolution and impact of various bilateral agreements/treaties covering the areas of Investments and Tax within developing countries. The discussion will illustrate the importance of treaties as key determinants or constraints on countries ability, or lack thereof, to use various domestic industrial, taxation and investment policy instruments to advance their short term and long term development and economic transformation agendas. The session will place a special emphasis on double tax treaties between developed and developing countries and long term prospects for mobilizing domestic resources and promoting industrial growth in developing countries. Panelist will further explore the nexus and interaction of tax treaties and bilateral investment treaties.
