INTERNATIONAL TAX: UN moves to draft new convention on international tax cooperation

As published on: jurist.org, Friday 24 November, 2023.

The United Nations General Assembly (UNGA) on Wednesday adopted a resolution to move forward with a proposal for a UN tax convention to promote international tax cooperation. The resolution, tabled by the Africa Group, was adopted with 125 member states voting for the resolution, 48 voting against and 9 abstaining.

The resolution provides for an intergovernmental committee to develop protocols and measures to combat tax-related illicit financial flows. It stipulates that the committee shall be made up of not more than 20 members elected on the basis of balanced geographical representation to ensure that the UN’s five regional groups are equally represented. Lastly, the resolution reminds the committee to take into account the needs of developing countries. Tove Ryding, Tax Coordinator at the European Network on Debt and Development, said that the resolution gave developing countries “a right to participate on an equal footing in the development of global tax standards.”

Illicit financial flows enable cross-border tax evasion that exacerbates inequalities between high-income and low-income countries. Last year, the UNGA adopted a resolution that called for more effective and inclusive international tax cooperation. In supporting that resolution, several UN experts commented that the current taxation rules that allow cross-border tax evasion and avoidance reduce states’ abilities to fulfill their human rights commitments. They also noted that low-income countries are currently underrepresented in tax-architecture decision-making while they are also suffering from worsening debt distress, socio-economic inequalities and climate crises. As of 2021, countries are losing a total of $483 billion in tax per year to global tax abuse committed by multinational corporations and wealthy individuals, according to Tax Justice Network.

The United Kingdom, one of the countries that voted against the resolution, proposed an amendment to remove the word “convention” from the resolution. Ryding criticized the UK and the 47 other countries that voted against the resolution, saying that they not only undermined a fair and effective global tax system but also allowed for tax evasion at the expense of their own citizens.


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