Via Martin Hearson, who has done a useful new blog on Uganda’s tax treaties entitled Uganda’s tax treaties: a legal and historical analysis. The article is by Mr. Hearson (of the London School of Economics) and Jalia Kangave of the East African School of Taxation.
For aficionados of tax and developing countries his post is well worth looking at in its entirety; we’ll just paste a few choice quotes here.
The present system of tax agreements creates the anomaly of aid in reverse – from poor to rich countries
Charles Irish, 1974
The ones claiming [reduced taxation] under the DTAs [Double Tax Agreements] are many, about one per day. The worst culprits are Mauritius, Netherlands. There is a lot of treaty shopping. A lot of companies trading in Uganda have their HQs in Mauritius.
An unnamed Uganda Revenue Authority official
In treaties between developing and developed countries . . . re-allocating tax revenues means regressive redistribution – to the benefit of the developed countries at the expense of the developing ones.
Tsilly Dagan, 2000
“Most of the time developing countries are disadvantaged by treaties. Treaties do not attract investment. It is other factors. . . . I know there’s empirical evidence that it [a treaty] has no effect on investment, but the reality country-to-country is that there’s a bluff that goes on, and countries don’t want to take the risk of losing big investments.”
Unnamed African treaty negotiator
When you sign an OECD model treaty, you say there is no withholding, or hardly any withholding, on outflows of cash to multinationals. Now why in hell do you want to sign that?
Lee Sheppard, 2013
The evidence that tax treaties attract new FDI into developing countries is inconclusive at best . . . most of the academic literature on tax treaties and developing countries consists of:
– Econometric papers often making herculean assumptions
– Legal papers that do not always consider realities “on the ground”
And there is plenty more good stuff where those came from.