29/07/21

INTERNATIONAL TAX: Corporate tax more important for Africa, Latin America than OECD countries.

As published on rte.ie, Thursday 29 July, 2021.

The Organisation for Economic Co-operation and Development, the OECD, has said corporate tax is more important as a source of tax revenue for governments in Africa and Latin America than it is for OECD countries.

Its annual publication, Corporate Tax Statistics, released today shows corporate tax accounts for 19.2% of total taxes in African countries and 15.6% of taxes in Latin American and the Caribbean. This compares to 10% in OECD countries.

In Ireland, corporate tax accounts for approximately 18% of tax revenue.

The publication finds that the rates of corporate tax have been falling globally over the past two decades.

Of 111 jurisdictions, 94 had a lower corporate tax rate in 2021 than they had in 2000. 13 were the same and four countries had higher rates. The average rate is 20% compared to 28.3% in 2000.

The OECD says this finding underlines the importance of reaching agreement on a global minimum corporate tax rate in order to limit tax competition.

Ireland has not signed up to this part of the OECD's framework on global corporate tax reform.