The Arab region incurs annual revenue losses of about 9 billion U.S. dollars due to corporate tax abuse practices by multinational corporations (MNCs), reported a brief issued by the United Nations Economic and Social Commission for Western Asia (ESCWA) on Wednesday.
“Due to corporate tax abuse practices by MNCs, such as shifting profits away from countries where they generate profits to minimize their tax liability, Arab governments suffer an annual loss of about 9 billion U.S. dollars of revenue,” said the brief.
Titled “Arab Policy Choices and Financing Opportunities in a New World Tax Order,” the brief noted that tax incentives offered by Arab countries did not dissuade MNCs from repatriating their profits.
ESCWA Executive Secretary Rola Dashti highlighted the importance of generating corporate tax, especially in middle-income countries.
“If undertaxed MNC subsidiaries pay the 15 percent global minimum corporate tax rate, this may generate 5.5-9 billion dollars in additional tax revenues annually for the region,” she said. ■