This study examines Global Tax Reform and Fiscal Sustainability in Developing Countries: Opportunities and Challenges under the OECD/G20 Two-Pillar Framework. The study employs a ex-post facto research design using panel data econometrics, analyzing a balanced panel of 45 developing countries (35 African and 10 non-African) over the period 2015–2024, with Nigeria examined separately as a case study. Data were sourced from the World Bank, IMF, OECD, UNCTAD, AfDB, and Nigerian national databases. Fiscal sustainability was measured using a composite index of tax-to-GDP ratio, revenue volatility, debt service ratio, and fiscal balance. Digital economy taxation reforms and Pillar One allocation were operationalized as composite indices capturing policy adoption, revenue mobilization, and administrative digitization. Fixed effects regression results reveal that digital economy taxation reforms exhibit a positive and highly significant effect on fiscal sustainability (β = 0.0042, p < 0.01), while MNE tax allocation under Pillar One shows a positive and significant relationship (β = 0.0028, p < 0.05), though with smaller magnitude. The model explains 34.2% of within-country variation in fiscal sustainability (R-squared = 0.342, F = 28.45, p < 0.001). The study concludes that fiscal sustainability in developing countries is increasingly contingent on synergistic implementation of domestic digital taxation and international profit allocation mechanisms. Recommendations include strengthening domestic digital taxation capacity through legal frameworks, administration digitization, and taxpayer education, and accelerating Pillar One participation via regional coordination through the African Union and ATAF to reduce implementation costs and enhance negotiating leverage.

Keywords: Global Tax Reform and Fiscal Sustainability.