Member States Reiterate Support for Global Tax Cooperation at the UN

GATJ

4 Apr 2023

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GATJ

4 Apr 2023

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The Global Alliance for Tax Justice (GATJ) joined other members of the Civil Society Financing for Development (CS FfD) Mechanism at the United Nations (UN) Economic and Social Council (Ecosoc)’s special meeting on international cooperation in tax matters, which took place last Friday (31 March), in New York. It gathered Member States, members of the UN Tax Committee, as well as experts and stakeholders of civil society, academia and the private sector. 

“This year’s meeting is timely. It comes following calls for more inclusive and effective international tax cooperation in the UN, including most recently from the UN General Assembly,” highlighted Lachezara Stoeva, president of the UN Ecosoc. “There is an urgent need for strengthening international tax cooperation to fight tax avoidance and evasion, as well as illicit financial flows. All of these activities have a common feature: they drain resources desperately needed to address the impact of today’s crises in lives and livelihoods into investing in sustainable development goals and climate action.”

During his participation in the meeting, Jose Ocampo, Minister of Finance of Colombia, expressed support for the creation of a UN-based process to reform international tax rules through a multilateral convention, highlighting that the Organisation for Economic Cooperation and Development (OECD)’s Two-Pillar proposal should “not be seen as the end of the road but rather as a first step”. “According to all existing estimates, the share of developing countries in this additional revenue [which would be raised through the OECD’s Two-Pillar solution] would be very small. We need to start thinking about solutions by adding a completely different approach for the global South. Such a new dialogue should start now, and the UN is definitely the adequate setting to undertake this important endeavour, obviously with the incorporation of the OECD Inclusive Framework,” he said. 

Ocampo also called for broader cooperation at all levels, mentioning that Colombia is leading with Chile the realisation of the First Summit of Latin America and the Caribbean for inclusive, sustainable and equitable global taxation. According to him, it aims to reach regional positions on international tax policy issues being discussed at the global level. “We are confident that strengthening regional tax cooperation will also contribute to making commonalities visible so that we can agree on simple and practical solutions. Collaborating with regional bodies is one of the key aspects that can contribute to strengthening the effectiveness of tax cooperation decisions,” he underlined. 

Representatives from the Africa Group, who are at the leadership of the calls for a UN process, and from several other developing countries that made interventions during the Ecosoc meeting reiterated their support for the creation of a UN intergovernmental tax body. Zainab Ahmed, Nigeria’s Minister of Finance, Budget and National Planning and keynote speaker at the meeting, said: “We fully support this resolution as it has potential to support the achievement of many initiatives that would enable Member States to mobilise resources to finance national development and also to achieve the SDGs. To achieve this however, we must address the lack of inclusiveness and equal footing on the development of the taxation frameworks.”

Representing the South Centre – an intergovernmental organisation with 55 members in Asia, Africa and Latin America –, Abdul Chowdhary strongly welcomed this historic development on international tax cooperation. “Based on the inputs, three demands are welcome: first, there must be an intergovernmental tax body at the UN; second, there is a need for a binding multilateral UN tax convention, which will provide a framework for international tax cooperation; and third, that the solution in its present form is inadequate,” he said. “We reiterate our full support to Member States and other developing countries in the forthcoming intergovernmental discussions in this regard.”

Some OECD countries and Singapore were the only ones resistant towards bringing discussions and decision-making to the UN, arguing that this would be a duplication of efforts. In response to that, Dereje Alemayehu, executive coordinator of GATJ, who leads the collaboration of the CS FfD Mechanism in tax matters, said: “The repeated word by those supporting the OECD is “duplication”. Usurpation is duplication, not the UN playing its legitimate role of facilitating intergovernmental negotiations. The issue is not about the OECD contributing technically, but about it taking the leadership role of reforming international tax rules. An international intergovernmental process led by a manipulative secretariat of an organisation with a limited membership cannot be fair nor inclusive. Oligarchy cannot be democratised. We need to democratise the process, and the UN should be the one facilitating negotiations on the reform of global tax rules. As civil society, we are also interested in this because we want to be part of the process, we want governments to be responsible and accountable for the positions they support.”

Watch Alemayehu’s full intervention:
 

Tove Maria Ryding, member of the GATJ’s coordination committee and tax justice policy and advocacy manager at Eurodad, added: “The UN is the only body with truly universal membership, and for that reason alone, the work of the UN will never be duplication. We also find it ironic to hear OECD countries say that the UN is duplicating, and at the same time, decide to set up a new body on climate change and tax. We hear the OECD countries say that it is because of the urgency that it has to set tax standards but let’s be honest on why we have raced so much time: it is because the OECD countries have blocked progress here at the UN,” she recalled. “We are delighted that we have finally reached consensus and we look so much forward to seeing truly global tax cooperation here at the UN.” 

Watch Ryding’s full intervention:

 

Moving forward: creating a UN tax governance structure

As GATJ and other members of the CS FfD Mechanism celebrate that Member States were able to reach consensus on an inclusive and effective tax cooperation at the UN, we now call on all governments to maintain the spirit of cooperation and adopt modalities for the new UN tax process as a matter of urgency, and to ensure this process becomes inclusive, transparent and productive. 

“The problem that we face is of a quite fundamental nature: when it comes to taxation, we lack the very framework for cooperation, including clear international principles, objectives and key mechanisms and institutions. We believe the right instrument to solve this challenge is a UN tax framework convention,” explained Ryding. Establishing a UN tax convention is the first step for the creation of a truly global tax governance structure where all countries can participate on an equal footing. 

Together with Eurodad, GATJ has developed a proposal for a UN tax convention, which links international tax governance to other key global commitments and obligations, including human rights, equality, and environmental protection. Besides, it would strengthen the global fight against illicit financial flows, including tax avoidance and evasion; create global coherence and reduce complexity in global tax rules; increase government accountability and public participation; as well as ensure a high standard of transparency.

 

About the Global Alliance for Tax Justice

The Global Alliance for Tax Justice (GATJ) is a South-led global coalition in the tax justice movement. Together we work for a world where progressive and redistributive tax policies counteract inequalities within and between countries, and generate the public funding needed to ensure essential services and human rights. Created in 2013, GATJ comprises regional tax justice networks in Asia (Tax & Fiscal Justice Asia), Africa (Tax Justice Network Africa), Latin America (Red de Justicia Fiscal de América Latina y el Caribe), Europe (Tax Justice-Europe) and North America (Canadians for Tax Fairness & FACT Coalition), collectively representing hundreds of organisations.

 

About the Civil Society Financing for Development Mechanism 

The Civil Society Financing for Development (CS FfD) Mechanism CSOs have been involved in the FfD process from the very beginning. Their coordination body is the CS FfD Mechanism, which is an open civil society platform with the single criterion for membership being representation of a public-benefit civil society organization. The Mechanism has been active in its present format (Global Social Economy Group — GSEG listserv) since the Doha FfD Review Conference in 2008, though many of its members are engaged since the Monterrey FfD Conference in 2002. It is an open virtual list containing several hundreds of organizations and networks from diverse regions and constituencies around the world. CS FfD Mechanism’s core principle is ensuring that civil society can speak with one collective voice and activities can include joint advocacy and campaigning, writing position papers and targeted statements, advancing CSO positions and allocating representatives to official sessions, doing joint evaluations of official papers, media work, among others. To join the CS FfD Mechanism, please fill the google form at this link: https://csoforffd.org/join-the-cso-ffd-group 

 

Photo credit: Sanjitbakshi 

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