Dr Sarah Godar: ”The race to the bottom is a policy choice – not a law of nature” 

The Finnish progressive think tank Kalevi Sorsa Foundation organized second Tax Conference Veroareena in Helsinki on 2 February 2024. In her conference presentation Dr Sarah Godar from DIW Berlin and EU Tax Observatory discussed the current state of international tax avoidance and tax competition. Video of her presentation can be watched on our YouTube channel.

Dr Godar’s presentation drew from the EU Tax Observatory Global Tax Evasion Report 2024 that she has co-authored. Godar deems important progress has been made with regard to tackling international tax evasion and tax avoidance. Specifically,  the 15 percent global minimum corporate income tax and the automatic information exchange regarding financial accounts have been significant reforms. 

These reforms hinder impacts of harmful tax competition. As a consequence, nation states will be better equipped to tax the winners of globalization: multinational corporations and high net worth individuals. ”The race to the bottom is now more of a policy choice than a law of nature”, Godard summarized. 

Despite the significant progress several loopholes that facilitate international tax avoidance and tax competition remain. Godar concluded her presentation by presenting policy recommendation to plug these loopholes. In addition to strengthening the international tax treaties it also requires unilateral measures such as stronger national anti-abuse rules. 

The programme of the Tax Conference Veroareena 2024 as well as the video stream of the whole event are on the confrence website. The next conference will be organized early in 2025.