The Two-Pillar Tax Reform Across Diverse Economies

This study provides a comprehensive analysis of the OECD/G20 Two-Pillar Solution, guided by three research questions: (i) how do the economic effects of the framework differ across developed countries, developing economies, and Small Island Developing States (SIDS); (ii) what compliance challenges does the framework generate across these economy types; and (iii) what policy implications arise from the implementation of the framework. By uniquely contrasting the distinct challenges faced by SIDS with those of larger economies, this research fills a critical gap in the literature on global taxation reforms. Using a qualitative methodology, the findings reveal that while developed countries benefit substantially from the new tax framework, developing nations and island economies encounter significant hurdles in compliance and revenue generation, highlighting the need for tailored policy recommendations. The study offers policy-relevant insights for promoting equity in global taxation while maintaining the economic resilience of vulnerable states in an increasingly digitalised economy.