📋 Written Ability Test (WAT)/Essay Analysis Guide

Should Countries Adopt a Global Minimum Corporate Tax to Prevent Tax Avoidance?

🌐 Understanding the Topic’s Importance

Corporate tax policies directly impact national revenues and global economic equity. A global minimum tax ties into themes of international cooperation, economic development, and ethical corporate governance.

🕒 Effective Planning and Writing

• Time Allocation:
  • Planning: 5 minutes
  • Writing: 20 minutes
  • Review: 5 minutes
• Preparation Tips: Gather data on tax avoidance impacts, stakeholders, and global initiatives like BEPS.

✍️ Introduction Techniques for Essays

• Contrast Approach: “While nations vie for corporate investment by lowering tax rates, they collectively lose $240 billion annually due to tax avoidance—a paradox that underscores the need for global tax reforms.”
• Timeline Approach: “From early tax haven disputes to the 2021 OECD proposal, the concept of a global minimum tax reflects decades of struggle for equitable taxation.”

📚 Structuring the Essay Body

1. Achievements:
   • Highlight reduced tax competition and improved fairness in global markets.
   • Use OECD and IMF data to substantiate success.
2. Challenges:
   • Mention enforcement issues and resistance from key economies.
   • Provide examples of Ireland and Hungary’s reservations.
3. Future Outlook:
   • Suggest broader inclusivity for developing countries.
   • Advocate for continuous revisions based on economic dynamics.

📝 Concluding Effectively

• Balanced Perspective: “The global minimum tax initiative is a significant step toward curbing tax avoidance but requires adaptive implementation to address diverse economic realities.”
• Global Comparison: “While OECD members lead the charge, the tax’s global success depends on equitable representation and robust enforcement.”

🔑 Recommendations for Sustainable Progress

• Strengthen international enforcement mechanisms.
• Introduce differential rates for developing nations.
• Promote digital tax systems for better compliance.

🌍 Sample Short Essays

1. Balanced Perspective: “A global minimum corporate tax aims to balance fairness and economic growth. While addressing tax avoidance, it must also cater to the unique needs of developing economies to achieve inclusivity.”
2. Solution-Oriented: “To combat profit shifting effectively, a 15% global tax must be complemented by robust enforcement and tailored provisions for lower-income nations.”
3. Global Comparison: “Global tax reforms like the OECD’s initiative highlight the need for international cooperation, mirroring successes seen in nations like Germany and challenges faced by tax havens like Ireland.”