Strategic Narratives in International Tax Policy Making: Beps Action 1 and the Stability Argument

Abstract

Drawing on narrative analysis developed by communications scholars, and applied by
scholars of economics and international law and in policy analysis, this article studies
action 1 of the Organisation for Economic Co-operation and Development’s (OECD’s)
base erosion and profit shifting (BEPS) project as a policy narrative. The authors outline
the role of narrative in international tax policy making and evaluate the probability
and the argumentative and material coherence of the OECD’s story about the need to
ensure the stability of the international tax framework and system. Focusing on the
narrative strategy adopted by the OECD to promote its pillar one proposal, the authors
assess the likely persuasiveness of the OECD’s stability argument—in particular, how
it may have influenced the response to the proposal by the members of the Inclusive
Framework on BEPS. The authors conclude that the OECD’s concern about potentially
destabilizing effects of digital services taxes and similar taxes on the international
income tax system propagates a global fiscal illusion, and may not sustain long-term
support for pillar one by many members of the Inclusive Framework

Keywords: Base Erosion and Profit Shifting, Digitalization, International Taxation, Tax Policy, Cooperation, Governance