New Delhi – For some time now, multinational companies (MNCs) have been gaming the rules of the global economy to minimize their tax liability – or even eliminate it altogether. And for some time now, the Independent Commission for the Reform of International Corporate Taxation (ICRICT) has argued for the unitary taxation of MNCs. Fortunately, there have been some encouraging recent signs that the idea of a unitary tax is gaining traction.

Introducing a global minimum effective corporate-tax rate on MNCs of between 20% and 25%, as the ICRICT (of which I am a member) advocates, would greatly weaken these firms’ financial incentives to use so-called transfer pricing among their subsidiaries to shift recorded profits to low-tax countries. Moreover, a global minimum would end the race to the bottom in which countries lower their national tax rates in order to attract investment by MNCs. Read the full piece via the World Economic Forum.