New Technologies in International Law / Tymofeyeva, Crhák et al.

quantum computer with a potential to break the cryptographic security keys securing the blockchain. 388 2.5 COVID-19 Pandemic Response and Future Development The COVID-19 pandemic accelerated the adoption of digital tools in various sectors, including tax administrations. As physical distancing measures were enforced, numerous tax authorities rapidly transitioned to remote operations. This health crisis also underscored the critical role of public revenue, especially in developing economies. 389 This shift towards digitalization in tax administration is likely to have lasting implications. Despite substantial technological advances in the last 40 years, technology alone cannot provide a simple answer for improving tax policy or administration in developing nations. 390 Administrators may seek quick solutions, such as purchasing new IT systems or recruiting additional personnel, 391 but successful digitalization also requires an adaptation of work patterns and the resolution of management difficulties, needing resilience and tenacity throughout the process’s various stages. 392 It is also prudent to consider that technological progress might also open fresh opportunities for tax evasion and avoidance for specific groups, particularly those with high incomes, perhaps leading to increasing economic imbalance. 393 Finally, the challenges faced by countries in their digital transformation journeys vary based on their digital maturity. Countries in early digitalization stages primarily grapple with establishing necessary infrastructure, while those more advanced encounter issues related to data security, privacy, and confidentiality, as well as workforce training for the digital era. 394 3. International Cooperation Navigating Global Tax Rules The complexities of international tax legislation, such as the OECD’s Base Erosion and Profit Shifting (BEPS) initiatives 395 , present developing countries with both obstacles and opportunities. While they aim to reduce tax avoidance tactics that 388 ILA, Sadowsky, M. e. c. White Paper 12 on Taxation: Taxing the Future (International Law Association (2023) , p. 67. 389 Jemiluyi OO, ‘Tax Revenue Mobilization Effort in Southern African Development Community (SADC) Bloc: Does ICT Matter?’ (2023), 11(1) Cogent Economics & Finance , p. 1. 390 Bird R and Zolt E, ‘Technology and Taxation in Developing Countries: From Hand to Mouse’ (2008) National Tax Journal 61, p. 42. 391 Vázquez-Caro J and Bird R, ‘Benchmarking Tax Administrations in Developing Countries: A Systemic Approach’ (2010) 9 E Journal of Tax Research , p. 30. 392 Addis Tax Initiative, ‘The Digital Transformation of Tax Administrations’ ( ati , 19 July 2023) . 393 Alm J, ‘Tax Evasion, Technology, and Inequality’ (2021) 22(4) Economics of Governance 321. 394 ‘The Digital Transformation of Tax Administrations’; Alm J, ‘Tax Evasion, Technology, and Inequality’ (2021) 22(4) Economics of Governance 321. 395 OECD, ‘International Collaboration to end Tax Avoidance’ accessed 3 October 2023. 3.1

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