To maximise returns, superstar companies reduce their tax liabilities by exploiting gaps in international tax laws. This offers them a competitive advantage over local companies, which cannot apply international tax rules. Addressing base erosion and profit shifting requires inclusive and proactive efforts to re-write obsolete international tax law rules. These should include, one, establishing a global tax body to spearhead coordinated and comprehensive reform of international tax law. Third is the abolition of tax havens for they distort the international tax regime.

Source: Daily Nation November 23, 2016 20:11 UTC