Submission: Draft Global Minimum Tax Bill

A joint submission by the Alternative Information Development Center (AIDC) and the Institute for Economic Justice (IEJ), supported by Tax Justice Network Africa and the #StopTheBleeding Campaign, providing comments on South Africa's Draft Global Minimum Tax Bill. While the authors ultimately oppose the implementation of the OECD's GloBE rules due to concerns over revenue potential, democratic legitimacy, and the erosion of tax sovereignty for the Global South, they offer specific proposals to maximize resource mobilization should the Bill proceed.

• The authors argue that the Draft Bill's approach of implementing OECD GloBE rules 'by reference' bypasses public and parliamentary oversight, as future updates to the OECD Commentary or Administrative Guidance would automatically apply to South African tax policy without legislative review.
• The current revenue threshold for multinational enterprises (MNEs) is set at EUR 750 million (R15.4 billion) for two consecutive fiscal years, which covers only 17 of the 243 MNEs headquartered in South Africa (7.3%). The authors propose lowering this threshold to ensure no multinational pays less than 15% tax in South Africa, arguing that a 15% rate is not a meaningful deterrent to investment compared to infrastructure and socio-economic factors.
• The submission notes that the Undertaxed Payments Rule (UTPR) is currently absent from the legislation. The authors recommend including UTPR provisions in the Draft Bill so they can become effective on 1 January 2025, serving as a backstop to the Income Inclusion Rule (IIR) to claw back tax losses from cross-border profit shifting to low-tax jurisdictions.
• The authors express serious concerns that the OECD's Pillar Two framework provides insufficient revenue for developing countries and undermines their tax sovereignty. They cite a 2024 Budget estimate of only R8 billion in revenue from the QMDTT and IRR, which they contrast with estimates that South Africa loses over R100 billion to illicit financial flows.
• The document criticizes the OECD's rule order, stating that the Income Inclusion Rule (IIR) gives the primary right to tax undertaxed profits to the home countries of MNEs, which predominantly benefit the Global North. The authors argue that a 15% top-up tax may be viewed as an 'acceptable' cost for MNEs to avoid higher statutory rates (such as 27%) in source jurisdictions.
• The authors describe the OECD's development process as undemocratic and exclusionary, alleging that proposals were often distributed less than 24 hours before discussion and that diplomatic pressure was used to secure consensus. They urge South Africa to instead support the UN Ad Hoc Tax Convention Committee's work to develop a UN Framework for International Tax Cooperation.

APA

Institute for Economic Justice (2024). Submission: Draft Global Minimum Tax Bill. https://iej.org.za/wp-content/uploads/2024/08/Global-Minimum-Tax-Bill-Submission.pdf

Chicago

Institute for Economic Justice. Submission: Draft Global Minimum Tax Bill. 2024. https://iej.org.za/wp-content/uploads/2024/08/Global-Minimum-Tax-Bill-Submission.pdf.

Wikipedia

{{cite press release |author=Institute for Economic Justice |title=Submission: Draft Global Minimum Tax Bill |date=28 March 2024 |url=https://iej.org.za/wp-content/uploads/2024/08/Global-Minimum-Tax-Bill-Submission.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@misc{instituteforeconomicjustice2024submission, author = {{Institute for Economic Justice}}, title = {{Submission: Draft Global Minimum Tax Bill}}, publisher = {Institute for Economic Justice}, year = {2024}, month = mar, url = {https://iej.org.za/wp-content/uploads/2024/08/Global-Minimum-Tax-Bill-Submission.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }