Shaping Societies: The Critical Role of International Tax Reforms

Bobby Yerkiah, Chairman of IFA Mauritius, opened the 15th Asia/Africa International Fiscal Association (IFA) conference by emphasizing the significance of international tax reforms in an increasingly interconnected world. He highlighted the “complex web of financial relationships” created by globalization, stressing that these reforms are not merely technical adjustments, but essential tools for shaping the future of global societies. Mr. Yerkiah underscored the importance of initiatives like the OECD’s Base Erosion and Profit Shifting (BEPS) project and the introduction of digital services taxes, which aim to create a fairer and more transparent tax system. Acknowledging the challenges ahead, he called on all stakeholders to collaborate, and urged collective action to build a more equitable, prosperous, and sustainable world.

The 15th Asia/Africa International Fiscal Association (IFA) conference, held in Mauritius on Friday 23 August, served as a critical platform for examining the sweeping changes occurring in global taxation. The event was marked by insightful discussions, spearheaded by thought leaders in the field of international taxation. One of the key figures at the conference, Bobby Yerkiah, Chairman of IFA Mauritius, delivered opening remarks that captured the essence of the challenges and opportunities that lie ahead.

“It is truly a privilege to explore and discuss a topic of profound significance, the effect of international tax reforms on society,” Mr. Yerkiah said, setting the stage for a series of discussions that would delve deep into the impact of globalization on tax policies. He highlighted how the intertwining of global economies has created a “complex web of financial relationships that influence the prosperity and wellbeing of nations and individuals alike.” This, he emphasized, makes the reforms in international taxation not just relevant, but crucial to shaping the future of societies worldwide.

By closing loopholes and ensuring that multinational corporations pay their fair share of taxes, we can generate additional revenue that governments can reinvest in public services

Mr Yerkiah went on to reflect on the profound changes in the global tax landscape over the past few decades. The Base Erosion and Profit Shifting (BEPS) initiative, led by the OECD, and the introduction of digital services taxes by various countries have been pivotal in driving towards a fairer and more transparent international tax system. “These reforms are not merely technical adjustments. They are the building blocks of a new fiscal architecture designed to address the challenges of the 21st century,” Mr. Yerkiah asserted.

One of the most significant outcomes of these reforms, according to Mr. Yerkiah, is their potential to reduce inequality. “By closing loopholes and ensuring that multinational corporations pay their fair share of taxes, we can generate additional revenue that governments can reinvest in public services,” he said. This reinvestment, he emphasized, has the power to lift millions out of poverty, fund education, healthcare, and infrastructure, and create opportunities for all.

Moreover, Mr. Yerkiah underscored how tax reforms can drive economic growth and innovation. “By creating a level playing field where businesses compete based on their products and services rather than their ability to exploit tax advantages, we encourage entrepreneurship and drive technological advancement,” he explained. This not only enhances productivity, but also leads to the creation of quality jobs, contributing to a more robust and resilient economy.

However, the path to meaningful tax reform is fraught with challenges. The diverging interests of stakeholders—governments, corporations, and citizens—make consensus difficult to achieve. Additionally, the rapid pace of technological change, and the rise of the digital economy present new and complex tax issues that require innovative solutions. 

Despite these challenges, Mr. Yerkiah highlighted the unique opportunity to draw on collective expertise and experience that the conference presented. “By working together, we can develop strategies that balance the need for revenue generation with the imperative of social justice,” he urged. He also stressed the importance of international cooperation, noting that “no single country can address these challenges alone.”

The Chairman of IFA Mauritius called on all stakeholders to “seize this moment to drive forward the reforms that will define our shared future. Together we can build a more equitable, prosperous, and sustainable world.”

Reflecting on the history of the International Fiscal Association, Mr. Yerkiah traced its origins back to 1938, in The Hague, Netherlands. “The International Fiscal Association, IFA, was established in the winter of 1938 at the end of the interval. Though there were indications of a new war, the need had arisen for an independent organisation,” he noted. The IFA was indeed created in response to the increasing internationalization of the world’s economies, which brought with it a host of new and complex tax issues. 

Since its inception, the IFA has played a pivotal role in addressing these challenges. “With the need for more studies of comparative fiscal law and the need to cope with these new challenges, a platform was created by a group of people involved, with the aim to encourage research on international tax issues,” Mr Yerkiah explained. This platform has today evolved into a global association with over 12,500 members from 114 countries, fostering discussions and solutions that have shaped international taxation for decades.

The association’s commitment to high standards in its debates and conclusions has allowed it to serve as an “independent and neutral platform” where experts from various sectors of society can exchange ideas on international taxation. The role of the IFA in providing solutions to the practical implementation of international tax principles has been particularly significant since the end of the Second World War. “The achievements of IFA are attributable to the number of high-level representatives from both the private and public sectors, including the courts, universities, and international governmental and non-governmental organisations,” the IFA president remarked, acknowledging the contributions of its members worldwide.