Document Type

Report

Disciplines

Taxation-Transnational | Tax Law

Abstract

This study discusses the legal and administrative implications of transferring to the developing countries part of the benefits accruing to both the migrants and to the developed countries from the reverse transfer of technology, or brain drain. Brain drain is an expression used to indicate the migration of professional, technical, and kindred persons (PTKs) from the developing countries to the developed. This is causing concern regarding the effect this loss of manpower is having on the economies of the developing countries.

The causes of brain drain are complex, and a number of remedies have been suggested at various times to deal with the problem. Some remedies involve direct or indirect restrictions on the flow of migration from developing to developed countries. These restrictions raise serious conflicts with basic human rights under a humanitarian international order. For that reason, they are precluded from consideration. The proposals discussed fall into three major categories: (1) tax incentives to encourage migrants to make voluntary contributions to special international human resource funds for use in the developing countries; (2) a supplementary tax on PTK income in the developed country of immigration, the revenue from which would be used to augment the net transfer of resources to the developing countries; and (3) an assessment on host developed countries in recognition of the benefits accruing to them from migration.

This study examines the main issues in instituting a scheme for voluntary contributions, alternative approaches to levying a supplementary tax on the income of PTKs from developing countries in developed countries, and the possibility and feasibility of introducing an international brain drain tax as a way of avoiding legal and administrative problems associated with levying a supplementary tax on the income of PTKs from developing countries in developed countries.

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