Globalisation and digitalisation have boosted economic activity while simultaneously posing challenges to international taxation. To solve the tax challenges arising from digitalisation, OECD has initiated Pillar One, to reformulate profit allocation rules by taxing companies in jurisdictions where they generate profits. Pillar One is estimated to increase tax revenue global income by US$220 billion, which is relatively low compared to the legal impacts it brought to developing states. Continuous global coordination is necessary to ensure that the rules are swiftly implemented. Regular technical assistance by the G20 and OECD, as well as enhancement of regional cooperation, are crucial to develop a common understanding of Pillar One implementation, ease compliance burdens, and mitigate high administrative costs.
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