Rethinking international taxation and energy policy post COVID-19 and the financial crisis for developing countries

Abstract

There is a key role for taxation in energy and public policy following the 2020 COVID-19 and resulting financial crisis. Taxation was already under the microscope at national, regional and international levels prior to 2020, and the potential for reform may slow down. Developing countries in particular are utilising their tax systems to mitigate the impacts of the 2020 crisis. This article highlights the race to the bottom in terms of taxation as governments seek foreign direct investment (FDI). It also highlights the issues in an influential sector of the economy – that of energy – and the impact on human rights as a result of tax abuse. It is advanced here that a ‘race to the bottom’ in international taxation will result in further erosion of human rights. In thinking of the future and after the 2020 crisis, developing countries need to develop sustainable and resilient economic growth, and consequently they need clear and strategic taxation policy. It can be acknowledged that there is a role for FDI in a crisis-hit economy, but for taxation policy not to have negative consequences more international action is needed in this area. Aggressive tax planning and erosion of the potential to raise tax revenue cannot inhibit the progress made over the last decade on all areas of international taxation.

Keywords:

• COVID-19
• 2020 crisis
• developing countries
• taxation
• energy law
• energy policy
• foreign direct investment
• human rights

Correction Statement

This article has been republished with minor changes. These changes do not impact the academic content of the article.

Notes

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22 Ibid.

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34 The BHS scandal where over 11 years, beginning in 2004, Sir Philip Green extracted £580 million from the company and sold it on for £1 in 2015, and it collapsed in 2016. And Apple established a subsidiary in Nevada between 2006 and 2012 and therefore earned $2.5 billion without tax liability in California, which needed it. Both points from M Mazzucato, The Value of Everything: Making and Taking in the Global Economy (Allen Lane, 2018).

35 Ibid.

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37 International Bar Association (Human Rights Institute), Tax Abuses, Poverty and Human Rights (IBA, 2013) www.ibanet.org/Article/NewDetail.aspx?ArticleUid=4A0CF930-A0D1-4784-8D09-F588DCDDFEA4 accessed 20 August 2018. It should be noted also that this book is available to download freely.

38 Ibid, 22.

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40 Ibid.

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