CARIBBEAN economist Marla Dukharan is criticising the global minimum tax as another door for discrimination.

Dukharan in the Caribbean Monthly Economic Report argued that while the United States, European Union and Organisation for Economic Co-operation and Development (OECD) convinced 136 countries (except Nigeria, Kenya, Pakiston and Sri Lanka) to agree to implement a 15 per cent global minimum tax, “there appears to be no empirical research done to justify the introduction” of the tax in the first place.

Dukharan added that there was no evidence of “what the appropriate tax rate and applicable threshold should be.”

“It appears that simply the universal desire for more fiscal revenue and the negotiation process itself have given rise to an arguably arbitrary 15 per cent tax on multinational corporations with revenue over €750 million, which is expected to earn US$150 billion in additional global tax revenues annually,” Dukharan pointed out citing figures taken from an OECD report as she questioned who will benefit.

She continued: “In addition to the fact that this first-of-its-kind global tax policy is devoid of any empirical justification, it also excluded poor countries. Tax Justice Network (TJN) criticised this deal for its inequity and exclusivity, stating ‘it will neither curb profit shifting effectively, nor provide substantial revenues to more than a handful of OECD member countries. Everyone else has been left out — especially lower-income countries.’ Maybe because poor countries are not really the problem?”

And pointing out that the countries pushing this deal themselves are responsible for two-thirds of the world’s corporate tax abuse, according to TJN, Dukharan also raised questions about the OECD which itself “failed to detect and prevent corporate tax abuse enabled by the OECD’s own member countries – and in some cases, pushed countries to rollback their tax transparency.”

She asked, “Can the OECD be trusted to police this tax effectively and equitably? Will OECD nations’ effective tax rates match the nominal minimum 15 per cent, or will their incentives and concessions lower the tax burden to improve their competitiveness?”

Oxfam, she points out, suggests the latter, “Calling this deal ‘historic’ is hypocritical and does not hold up to even the most minor scrutiny…including a complex web of exemptions that could let big offenders like Amazon off the hook.” In making the argument, Dukharan outlined, the OECD’s own research found that “Countries with a lower corporate income tax are likely to grow faster and attract more investment and jobs than high-tax countries.”

“What manner of institution goes through the trouble of conducting empirical research, just to ignore it?”

Already the USA’s Foreign Account Tax Compliance Act (FATCA) has had to undergo scrutiny for its unintended consequences, and so too the Financial Action Task Force. “The fact that the likely unintended consequences of this global minimum tax are not even contemplated, is yet another elementary mistake,” she said. “There is no reason to believe that the OECD, which is already deficient in policing existing tax standards, can produce a better outcome with this deal. Perhaps proper policing was never the intention. We have seen this movie before. Since the beginning of time, the powerful have created structures to maintain and solidify their position, not weaken it. And institutionalised discrimination and systematic marginalisation of weaker states continues unabated. The effects of such treatment only radicalises and drives disaffected states towards other pariahs, and their most vulnerable towards the powerful nations. For there is no ‘New World’ left for the marginalised masses to flee to, only the ‘First World.’ Eventually, ‘their’ problems become yours . ‘Because when the rain falls, it don’t fall on one man’s housetop – remember that’ ,” she ended citing a line from the Bob Marley and the Wailers hit So Much Things To Say.