A UN Convention on Tax – momentum just keeps growing


Eurodad's Tax Justice Coordinator Tove Maria Ryding analyses what this week in New York has meant for a UN Convention on Tax and what is in store in the coming months.

As heads of state and high-level ministers from around the world gathered for the UN General Assembly in New York this week, international tax cooperation was on the agenda as part of a High-level dialogue on Financing for Development.

Ahead of the dialogue, in August 2023, the UN Secretary-General António Guterres published a ground-breaking report outlining the possible options for strengthening international tax cooperation. Among the three options outlined, number two is a UN Framework Convention on Tax. This matches a long-standing call from civil society organisations around the world, and together with the Global Alliance for Tax Justice, Eurodad has tabled a full proposal for what such a convention could look like.

The current UN momentum on tax was kickstarted by the Africa Group, which tabled a historic resolution at the Second Committee of the UN General Assembly last year. The resolution, which was adopted by consensus in November 2022, included the decision to start an intergovernmental process on tax at the UN. The discussion is now centered around how the new process will run and, not least, what it should produce. On this issue, the Africa Group has been very clear in its call for a UN Convention on Tax and this week in New York, the Deputy Prime Minister of Ethiopia stressed that: “We believe public finance and domestic resource mobilization are key to ensure progress in the implementation of the SDGs. In this regard, Ethiopia underlines that illicit financial flows should immediately be addressed. Thus, we call on concerted effort to implement the General Assembly’s resolution on a UN Convention on International Tax Cooperation.” Nigeria also took the floor during the High-level dialogue on Financing for Development and noted that they are proud to lead a united Africa on this issue.

And now the support for the Africa Group is growing. Already during a discussion in April 2023, the then finance minister of Colombia, José Antonio Ocampo, came out in support for a UN Convention on Tax, and this week in New York, the foreign minister of Mexico, Alicia Bárcena, took the floor and underlined that ”[Mexico advocates for] supporting the call of the African group to advance the design of a possible inclusive tax instrument or framework, with a view to creating a convention that includes the payment of taxes by companies in the places where they generate their profits”. 

Both Colombia and Mexico are members of the OECD, and historically, the opposition against starting an intergovernmental process on tax at the UN has come from that group of  countries. As an alternative to a UN tax process, the OECD countries have insisted that global tax rules should be set by the OECD where they, as members, have more power than the very large group of developing countries that are not members. While most OECD countries stayed quiet in this week’s discussion at the UN in New York, it is safe to assume that many of them still have the OECD-track as their preferred option. But it is also clear that while the Africa Group is united and seeing growing support from other developing countries, the group of OECD member countries is now split on this issue.

There is also clear potential for further fractures in the OECD country group as a growing number of developed countries are bound to realise that it is not only developing countries that have major economic interests in stronger global measures to crack down on tax havens. International tax abuse continues to cost countries in both the global north and south hundreds of billions of dollars in lost tax income every year, and the OECD’s track record when it comes to solving this issue is anything but impressive. The latest attempt – the OECD two-pillar solution – resulted in a deeply flawed outcome, and the so-called “OECD Minimum Tax” – also known as pillar two of the deal – has now been nicknamed a “Tax Haven rewards programme”.  With this in mind, there is clear potential for a “Race to the Top Alliance” of countries that want more action to stop international tax dodging.

Among civil society organisations, a strong and rapidly growing international coalition is already in existence, and in fact, the Global Alliance for Tax Justice is currently celebrating its 10-year anniversary. A truly global tax governance framework – in the form of a UN Convention on Tax – is a top campaign priority for the organisation and the civil society work at the UN this week was complemented by street action in capitals. This was not least the case in Asia, where the regional member of the Global Alliance for Tax Justice – Tax and Fiscal Justice Asia (TAFJA) - kicked off the Asia Days of Action for Tax Justice 2023 together with Eurodad’s sister-network the Asian Peoples’ Movement on Debt and Development (APMDD).

At the UN level, the tax discussion will now continue in the Second Committee of the UN General Assembly, where the negotiations about next steps for the intergovernmental tax process – and a potential UN Convention on Tax – are expected to start in October 2023.