Profit shifting from Nigeria to Europe: The impact on human rights
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View abstract on PubMed
Summary
This summary is machine-generated.Multinational corporations shifting profits to tax havens cost Nigeria billions in tax revenue, hindering access to essential rights like clean water and education. International tax cooperation is crucial to ensure these rights are realized globally.
Area Of Science
- Economics
- Human Rights Law
- Public Finance
Background
- The Universal Declaration of Human Rights enshrines economic and social rights, yet millions lack access to essentials like clean water, sanitation, healthcare, and education.
- Government tax revenue is vital for ensuring these rights, but profit shifting by multinational corporations significantly erodes this revenue base.
- Globally, an estimated 10% of corporate tax revenue is lost due to profit shifting.
Purpose Of The Study
- To examine the impact of corporate profit shifting on Nigeria's tax revenue.
- To assess the consequences of these revenue losses on citizens' access to economic and social rights and on governance in Nigeria.
- To evaluate the effectiveness of current international tax reforms and propose solutions.
Main Methods
- Utilized data on profits shifted from Nigeria to European tax havens (Wier and Zucman, 2022).
- Employed the Government Revenue and Development Estimations (GRADE) model to quantify the impact of revenue losses.
- Analyzed the disparity in the fulfillment of economic and social rights between Nigeria and European tax havens.
Main Results
- Lost tax revenue from profit shifting could fund clean water access for 500,000 Nigerians and basic sanitation for nearly 800,000 daily.
- Additional revenue could provide education for 150,000 children and prevent 4,063 child deaths annually.
- Profit shifting yields negligible rights-related gains for European tax havens, where these rights are largely met.
Conclusions
- Current Organisation for Economic Co-operation and Development (OECD) tax reforms are insufficient to ensure a global order where rights are realized.
- Urgent international tax cooperation at the United Nations is needed, including reforms like unitary taxation with formulary apportionment.
- Short- to medium-term measures such as raising the global minimum corporate tax rate and enhancing tax transparency are essential.
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