Position Paper on the UN Framework Convention on International Tax Cooperation
- International Lawyers Project
- Dec 15, 2024
- 2 min read
Situation
For decades, the international tax arena has been dominated by the Organisation for Economic Co-operation and Development (OECD) which is an exclusive club of rich countries. As a result, the rules developed have been skewed in favour of Global North countries at the expense of those in the Global South. While the United Nations Tax Committee has attempted to ensure developing countries interests are protected, it has been unable to effectively do so due to its limited mandate. There has therefore long been a need for the development of an inclusive body that is truly representative of all countries. Concrete plans for the development of such a body began in 2022 when the Economic Commission for Africa Conference of African Ministers of Finance, Planning, and Economic Development called for negotiations towards an international convention on tax matters under the auspices of the UN. Considerable lobbying and coordination among developing countries and civil society organisations then followed to ensure that an improved global tax governance model was adopted that allows them to participate on an equal footing. This led to the adoption of the terms of reference for the UN Framework Convention on International Tax Cooperation (UNFCITC).
ILP’s Action
ILP developed a position paper on the UNFCITC in conjunction with Tax Justice Network Africa (TJNA). The paper highlighted historical challenges, the gaps that exist under the OECD-led model, and the substantive aspects that the Convention should cover. The position paper informed discussions and positions within the Working Group on the UN Tax Convention (a group of 53 civil society organisations that provides input on the UNFCITC). It also helped inform the oral submissions TJNA made to the Ad Hoc Committee drafting the terms of reference for the UNFCITC during their second session.
Impact
The position paper enhanced the capacity of civil society organisations to engage in the process of drafting the terms of reference for the UNFCITC and to seek change in the development of tax rules which will benefit the Global South. As a result, the terms of reference, adopted by the United Nations General Assembly in November 2024, reflect the needs of developing countries. For instance, critical issues affecting developing countries such as illicit financial flows are now included in the global agenda. The position paper has therefore contributed to the correction of historical imbalances and the development of binding rules that are truly inclusive and representative of both Global North and Global South countries. It also enhanced the voices within developing countries during the negotiations.