TAX SOVEREIGNTY: A DEBATE ON THE ACCEPTABILITY OF HARMFUL TAX COMPETITION

Abstract

Tax sovereignty requires independence without outside interference, but in a practical sense, this seems otherwise.  Global actors have come up with many tax policies, both for harmonization of tax system into a single or uniform tax rate and elimination of harmful tax competition. This paper examined whether or not the rights conferred on individual sovereign states are absolute. It further examined the push towards harmonization of the tax system into a single or uniform tax rate by international organizations driven by efforts to combat tax competition, tax base erosion, and or tax avoidance. The paper adopts a doctrinal methodology; wherein primary and secondary sources of materials were examined. It concluded by stating that though the rights of the sovereign states are not completely absolute, global actors should come up with a tax policy or strategies that will convince all states to submit to her without coercion or any form of force.