ABSTRACT

Without self-sustaining commerce, developing countries cannot move towards the recognition of basic human rights and twenty-first century living standards. The purpose of this article is to explore the legal and economic theories of taxation and tariffs applied to the elements of civic infrastructure: a robust physical transportation system and an economic structure. This article advocates for conforming trade union policy towards an efficiency hypothesis method dubbed “tax minimalism theory” that espouses tax theory norms: fairness, efficiency, and simplicity of administration. Applying this theory, this paper will critique newly implemented tariff laws in West Africa by the Economic Community of West African States for its adverse effects on the transportation sector and laissez-faire trade liberalization in Ghana and Nigeria.

INTRODUCTION

Human rights mean nothing to a nation without economic structure to promulgate human dignity and prosperity. 2 Without access to basic provisions, such as food,3 water, and comfortable shelter, people do not engage in economic cooperation and civic discourse. 4

To move society towards the recognition of basic human rights by closing the gap in income disparity, there are several necessary elements to foster a twenty-first century economy in the developing world. 5 The purpose of this Note is to explore what each of these elements are and how to apply them. Part I states that infrastructure is the foundation to advancing economic development in two-fold design: (1) a robust physical transportation system and (2) an economic structure in trade union policy. Part II advocates for a fair taxation system in cross-border commerce and legal codes promoting diverse business and capital generation to ensure the sustainability of infrastructure to bridge the commercial gap between cities and rural regions. Also, there must be a method to ensure enforcement of an economic infrastructure by managing foreign capital to a high degree of professionalism and honesty. Lastly, Part III applies the new paradigm of tax minimalism theory as an efficiency hypothesis to foster economic infrastructure that shapes trust in public institutions, national identity, and base development. In short, this Note will critique the Common External Tariff (CET), newly implemented by the Economic Community of West African States (ECOWAS), and its adverse effects on trade liberalization compounded with Value-Added Taxes (VAT), and further excise taxes in Ghana and Nigeria. The compounded levies continue to promulgate restrictive trade policies on food, consumer products, and particularly specific goods for economic development crucial to transportation infrastructure. The solution posited is lowering import tariffs and code reformation to incentivize foreign investment in West African countries through an innovative methodology dubbed “tax minimalism theory.” This theory is inspired from aesthetic design principles from a broad range of artistic professions to conform to the policies espoused by tax theorists: fairness, efficiency, and simplicity of administration.

I. GENERATING THE IDEA OF SUSTAINABLE INFRASTRUCTURE

Experts are universally in agreement that the foundation in solving economic challenges in the developing world begins with infrastructure.6 However, without the means to sustain a robust network of ports, roads, communications, and power generation, a nation will only survive in the modern world for a brief season. 7 With the absence of a proper central government authority, a local population can only expect more social destabilization and a lack of their most basic human rights to development.8

Likewise, the same sustainability problems plague developed countries and their transportation infrastructure systems, as in the case of the United States for example. 9 Studies have shown that the United States has serious infrastructure problems 10 because of a lack of transport network maintenance and new infrastructure projects to streamline commerce and transportation. The same infrastructure sustainability problems can be said for much of the developed world, which sorely needs external investment to fund critical transportation needs. 11 Before investment opportunities in infrastructure development can commence on the African continent, there is a need for liberalized trade laws to foster the self-replenishing cycle of a transport system.12 But to create the cycle, raw infrastructure materials and assembled machinery must be imported from the developed world in the most efficient and cost-effective manner.13

† This title is an homage to the renowned African novel on postcolonialism. CHINUA ACHEBE , THINGS FALL APART (1958).
†† Regent University School of Law, J.D. 2016. Mr. Gamboa received his Bachelor of Music magna cum laude with a double major in Violin Performance and Political Science from the John J. Cali School of Music and Montclair State University in 2012. Special thanks to Professor Kathleen McKee for her expert guidance and the staff of the Journal of Global Justice and Public Policy for their insight into the nuances of international law.
1 CHINUA ACHEBE , THE AFRICAN TRILOGY : THINGS FALL APART , NO LONGER AT EASE, AND ARROW OF GOD 136 (2010).
2 William Armbruster, Africa Road Less Travelled, T HE JOURNAL OF COMMERCE, (Mar. 15, 2010), http://www.joc.com/regulation-policy/africa%E2%80%99s-road-less-travelled_20100315.html (explaining that experts point to the first economic challenge to Africa, which is infrastructure); Glen T. Martin, Freedom, Economic Prosperity, and the Earth Constitution, RADFORD UNIV . (Dec. 2010), http://www.radford.edu/gmartin/Freedom.Economics.CFE.Nov.10.htm.
3 Faajir Avanenge, Effects of Market Infrastructure and Poor Access to Markets on Marketing of Grains in Selected States of Northern Nigeria, West Africa, 9 J. BUS. & RETAIL MGMT . RES. 110, 116–17 (2015) (concluding that there is a significant relationship existing between poor access to markets and marketing of grains in the states north of Nigeria).
4 Armbruster, supra note 2 (“Port congestion and poor roads hamper the development of agriculture,” the sector with the greatest potential for Africa’s economic development, because the continent has the potential to not just feed itself, but to export.); Wangari Maathai, Bottlenecks to Development in Africa, GREEN BELT MOVEMENT (Aug. 30, 1995), http://www.greenbeltmovement.org/wangari-maathai/key-speeches-and-articles/bottleknecks-to-development-in-africa.
5 G.A. Res. 41/128, annex, art. 8, Declaration on the Right to Development (Dec. 4, 1986).
6 Armbruster, supra note 2.
7 Id.
8 U.S. INST. OF P EACE, GOVERNANCE , CORRUPTION, AND CONFLICT, 1, 9, 13, (2016), http://www.usip.org/sites/default/files/ETC-D/NPEC/480021.PDF.
9 Ambe J. Njoh, Impact of Transportation Infrastructure on Development in East Africa and the Indian Ocean Region, 138 J. URB. PLAN . DEV. 1, 1–3 (2012).
10 AARON M. RENN, BEYOND REPAIR ? AMERICA’S INFRASTRUCTURE CRISIS IS LOCAL , 41 MANHATTAN INST. FOR POLICY RES. ISSUE BRIEF 1–2, 5 (2015) (noting that the major
problems are at the local level without federal funding and suggesting that new and regular projects are passed over by cheaper and underfunded methods, which increases the cost of
maintenance over time).
11 Rabah Arezki, Patrick Bolton, Sanjay Peters, Frederic Samama, and Joseph Stiglitz, From Global Savings Glut to Financing Infrastructure: The Advent of Investment Platforms, IMF W ORKING P APER (Feb. 2016), https://www.imf.org/external/pubs/ft/wp/2016/wp1618.pdf.
12 Kelly Mua Kingsley, Infrastructure Development in Fragile Economies Will Foster Better African Integration, AFRICA POL. J. 1, 3 (Apr. 25, 2016), https://apj.fas.harvard.edu/infrastructure-development-in-fragile-economies-will-foster-better-african-integration/.
13 Armbruster, supra note 2.

INTRODUCTION

Individual European country taxes have recently been tailored towards a policy that incentivizes clean energy alternatives in order to
curb CO2 and other harmful emissions that contribute to the continent’s carbon footprint.1 Cutting against this established tax policy, the European Court of Justice surprisingly held in European Commission v. United Kingdom of Great Britain and Northern Ireland2 that a national discount on Value-Added Tax (“VAT”) for energy-saving materials flouted European Union rules by misapplying two exemptions. 3

The defendant, the United Kingdom, offered a reduced rate of five percent VAT on solar panels, water turbines, and wind turbines, among other home improvements, to all British homeowners who sought installation to improve their properties.4 Based on the holding in this case, the British government must comply with European Union law by returning these clean energy alternatives to the full twenty percent VAT or face severe fines for noncompliance.5

Under external pressure, the United Kingdom has caved to the European Court of Justice’s holding and essentially surrendered
sovereignty in national legislative interpretation to the European Union, where the European Union has no place to determine interpretation of the law. This Comment argues that the European Union has overstepped its boundaries as a supra-national entity when it sets the definition of “social policy” that is solely in the interpretive domain of a member state at the national level. In Part I, the discrepancies between United Kingdom legislation and European Union law are contrasted and given context. Part II discusses the exemptions analyzed in the European Court of Justice holding and their application to British law. Finally, Part III, exposes the social damage caused by higher costs to clean energy and the encroachment of national sovereignty by the European Union.

I. THE CONTEXT OF EUROPEAN AND UNITED KINGDOM LAW

Prior to litigation in September 2011, the United Kingdom was given formal notice that a reduced VAT on clean-energy goods and services was contrary to European Union law.6 The United Kingdom agreed in November 2011 only to the reduced rate for goods and services for the charitable purposes exemption, but would apply full VAT rates to energy-saving materials in 2013.7 The European Commission sent another notice of noncompliance to the United Kingdom in June 2012, but the United Kingdom reiterated in August that it complied with European Union law.8 The Commission was unsatisfied with the United Kingdom’s answer and commenced legal action. 9