Hollowness and Indifference in Global Tax Governance: The Cases of Haiti and Nicaragua

Abstract

This paper explores the hollowness of formal participation and the indifferent attitudes of countries toward global tax governance, focusing on the cases of Haiti and Nicaragua. Both countries, despite their formal or absent participation in international tax initiatives, show limited progress in adopting international tax standards. While Haiti has been a member of the OECD's Inclusive Framework on BEPS and the Global Forum since 2017, it has yet to implement significant reforms or comply with minimum international tax standards. Nicaragua, on the other hand, remains largely isolated from global tax governance, showing little interest in participating in international initiatives like the Inclusive Framework or the Global Forum, even rejecting formal invitations to engage. These inactive approaches are seen as contradictory to their recent votes in favour of the latest UN resolutions supporting the establishment of a UN Framework Convention on International Tax Cooperation.

The author argues that formal participation in global tax initiatives does not guarantee the effective implementation of international standards at the national level. Both countries grapple with significant political and socioeconomic challenges—such as instability, corruption, and institutional weakness—which hinder meaningful involvement in tax governance. This highlights the need for global tax frameworks to account for the unique contexts of developing nations rather than assuming uniform compliance.

Finally, the study concludes that internal conflicts and crises, like those seen in Haiti and Nicaragua, can obstruct efforts to engage in international tax cooperation. It further stresses the need for greater transparency, more empirical research, and a nuanced approach to assessing the participation of developing countries in international tax efforts while avoiding the oversimplification of their complex realities.

Keywords: Haiti, Nicaragua, Participation, Tax, Governance, taxation, international tax, OECD, United Nations, BEPS, base erosion and profit shifting, Pillar Two, legislation, international law, international organizations, tax, international political economy, Developing Countries