Who profits from a weakened international taxation system: MNCs, the super-rich or states?

This fact sheet by the Institute for Economic Justice examines the systemic failures of the international taxation system, which allow multinational corporations (MNCs) and the super-rich to avoid taxes. It critiques the G20/OECD Two-Pillar Framework for favoring developed nations and discusses the push for a more democratic UN Tax Convention, while evaluating the role of South Africa's G20 presidency in advancing tax justice.

• Cross-border tax abuses result in significant global revenue losses for governments, estimated at US$492 billion in 2024 alone.
• Wealth inequality is extreme, with global billionaire wealth growing three times faster in 2024 than in 2023. In South Africa, the top 10% of the population holds 86% of the aggregate wealth.
• Multinational corporations (MNCs) exploit outdated tax laws and the digital economy to minimize tax liabilities. They use 'illicit financial flows' to shift profits to tax havens and secret jurisdictions, often utilizing accounting firms and lawyers to avoid paying taxes in countries where they have no physical presence.
• The G20/OECD Two-Pillar Framework aims to address digital economy challenges and curb MNC tax avoidance. Pillar one focuses on allocating taxing rights to countries where MNCs operate without a physical presence, while Pillar two introduces a 15% global minimum corporate tax.
• The Two-Pillar Framework is criticized for disadvantaging developing countries due to limited representation, complex rules, and insufficient revenue gains. While it may generate $100 billion annually, this is far less than the estimated $600 billion lost annually to tax avoidance.
• There is a growing movement, led by the Global South and the Africa Group, to establish a UN Framework Convention on International Tax Cooperation. This is seen as a more democratic alternative to the OECD-led process, with formal negotiations mandated from February 2025 through 2027.
• While Brazil's G20 Presidency prioritized 'Taxing the Super Rich', and South Africa expressed support for this initiative, the document states that South Africa's National Treasury has not appeared committed to driving the agenda forward, and meaningful progress has not been made in G20 meetings.

APA

Institute for Economic Justice (2025). Who profits from a weakened international taxation system: MNCs, the super-rich or states? https://iej.org.za/wp-content/uploads/2025/08/IEJ-G20factsheet2-International-taxation-web-3.pdf

Chicago

Institute for Economic Justice. Who profits from a weakened international taxation system: MNCs, the super-rich or states? 2025. https://iej.org.za/wp-content/uploads/2025/08/IEJ-G20factsheet2-International-taxation-web-3.pdf.

Wikipedia

{{cite report |author=Institute for Economic Justice |title=Who profits from a weakened international taxation system: MNCs, the super-rich or states? |date=August 2025 |url=https://iej.org.za/wp-content/uploads/2025/08/IEJ-G20factsheet2-International-taxation-web-3.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{instituteforeconomicjustice2025who, author = {{Institute for Economic Justice}}, title = {{Who profits from a weakened international taxation system: MNCs, the super-rich or states?}}, institution = {Institute for Economic Justice}, year = {2025}, month = aug, url = {https://iej.org.za/wp-content/uploads/2025/08/IEJ-G20factsheet2-International-taxation-web-3.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }