West African Tax Administration Forum (WATAF) has issued an advisory asking its members to carry out revenue impact analysis to ensure that the OECD’s proposed Pillar One, Amount A rules deliver positive revenue outcome before committing to its implementation.
WATAF asked its members to make any decision of signing or otherwise of any Multilateral Instrument in this regard only where the benefit can be empirically confirmed to outweigh its cost, including the cost of forgone digital service taxes, which are to be withdrawn with respect to all companies in the case of Amount A.
WATAF said that the OECD’s proposed Pillar One, Amount A tax proposal still brings little or no returns per revenue to smaller economies. It added that the consideration of Amount B as the most appropriate method for baseline marketing and distribution activities, except comparable uncontrolled price, should be a priority for WATAF members.
In respect of Pillar 2 tax proposal, WATAF asked its members to carry out a quick reform to weed out wasteful tax incentives and introduce countermeasures like alternative minimum taxes, domestic top-up taxes, and similar fiscal policy measures.
Members should prioritize having in their domestic law a domestic minimum top up tax and to revise their incentives’ policy, it said.