Over the past two weeks, the Organisation for Economic Co-operation and Development has held two meetings on its global digital tax initiative, as many disagreements still remain.

A research report issued by the Fair Tax Mark in 2019 says that Amazon, Google, Apple, Facebook, Microsoft and Netflix, all based in the United States, have altogether evaded at least $155.3 billion in tax over the past decade. The idea behind a global digital tax is to make it more difficult for them to evade tax.

Most of the disagreements on the initiative issued last year touch upon some inherent problems in the global governance system. More than technical taxation problems, it has to do with games different political powers play.

What has delayed the implementation of the initiative, which was agreed upon by all stakeholders at the end of last year, is the unexpected resurgence of the novel coronavirus, as well as the erstwhile Donald Trump administration's insistence on postponing relevant negotiations. The Trump administration's opposition originates from its concern that several giant internet corporations from the US would face taxation once the initiative took effect.

The OECD global digital tax initiative is also facing opposition from developing countries, as it does not rationally reflect their concerns. That's why, last August, the United Nations Economic and Social Council's taxation expert panel proposed a digital tax reform plan different from that of the OECD in order to balance the interests of both developed and developing countries.
The UN digital taxation plan invests developing countries, which are usually sources of profit for cross-border internet companies, with greater autonomy in the digital taxation process and proposes a dispute settlement mechanism based on bilateral and multilateral arrangements, so as to avoid double taxation, making it easier for developing countries to adapt to the new taxation system.

In spite of the aforementioned challenges, the countries are likely to reach a consensus under the framework of global governance, as the cross-border corporations in digital economy themselves prefer a unified global digital taxation system in which different countries can tax them in their respective ways.

The advancement of the global digital tax agenda is closely related to many key issues of global governance, inclusive development and fair international order, such as reform of taxation transparency and reform on taxation base transfer and tax haven, and to make breakthroughs in it can boost reforms in many other key fields.