Rajul Awasthi

Base Erosion and Profit Shifting (BEPS) is a global problem which requires global solutions. BEPS refers to tax planning strategies that exploit gaps and mismatches in tax rules to artificially shift profits to low or no-tax locations where there is little or no economic activity, resulting in significant savings in corporate taxes. BEPS is of major significance for developing countries due to their heavy reliance on corporate income tax, particularly from multinational enterprises (MNEs).

In Nigeria’s Kaduna State, the government has quietly improved service delivery and increased the effectiveness of public spending by enlisting citizens as its “Eyes and Ears” on the ground. Through this program, which receives financial and technical support from the World Bank’s Economic Transformation Program for Results (PforR), the state government has been a global leader in leveraging technology to provide more citizen-centric service delivery.

A sub-Saharan African tax commissioner went to buy a bicycle for his son. The seller asked if he would like to get a receipt and pay a 15 percent higher price, or take the bike with no receipt at a lower price. The tax commissioner paused and thought. What would you do? Tax administrators, and most other people in developing countries, grapple with this issue every day. A large shadow economy undermines tax collections; reducing the shadow economy is associated with higher tax collections.