The UN General Assembly is expected to approve terms for negotiating a Framework Convention on International Tax Cooperation, transitioning governance from the OECD to the UN. Civil society groups urge the OECD to address potential human rights impacts of its proposals, especially regarding inequalities faced by Global South countries. Despite concerns raised by UN experts and advocacy organizations, the OECD has not substantively engaged with these issues, emphasizing the need for accountability and inclusive policies in global tax reform.
The UN General Assembly is poised to endorse the terms for negotiating the Framework Convention on International Tax Cooperation (UNFCITC) in November, marking a pivotal shift in global tax governance from the OECD—an organization representing just 38 of the wealthiest nations—to a more inclusive UN forum. Civil society groups advocate for this transition, urging the OECD to address concerns that its so-called ‘two-pillar solution’ could undermine human rights, particularly in developing countries.
In December of the previous year, eight UN human rights experts expressed grave concerns about how the OECD’s proposals might exacerbate racial and gender inequalities while depriving the Global South of essential revenues for economic and social rights. They highlighted the detrimental impacts on predominantly non-white nations, arguing that these reforms could severely hinder development and perpetuate poverty.
In August, the Ad Hoc Committee created by the Africa Group approved negotiation terms favorably, with a notable majority supporting language that emphasizes adherence to human rights principles. Despite this, many OECD countries chose to abstain or oppose the motion, displaying hesitance towards aligning with the rights-focused agenda. Throughout the committee discussions, the OECD’s emphasis has been on limiting the UN process in favor of maintaining parallel reforms, asserting that the UN should merely complement their initiatives.
In May, a coalition of advocacy organizations called on the OECD to take their concerns seriously and carry out thorough human rights impact assessments regarding the proposed tax reforms. The OECD’s response, however, failed to provide substantive evidence or engage with the human rights implications, insisting instead on its commitment to promoting equality and combating discrimination globally. Advocates have countered these claims, arguing the OECD’s proposed global minimum tax might lead to a destructive race to the bottom, disproportionately affecting Global South economies.
The OECD has long dominated global tax reform, a power handed down during decolonization, which, as some argue, fostered tax havens that drain over $492 billion from global tax authorities annually. Now is the time for a transformation away from this historical neocolonial framework. UN experts have underscored the importance of this UN-led process, characterizing it as a unique opportunity to reshape financial architecture and effectively tackle the multifaceted crises hitting the Global South.
The call is for the OECD not just to pay lip service to human rights but to actively engage in an equitable global economic governance approach that respects the dignity of all peoples. This is no longer a time for words but for actions that reflect genuine commitment to a fairer world.
In recent years, the global discourse surrounding tax justice and equity has gained momentum, particularly with the increasing awareness of the impact of tax policies on human rights. The UN’s involvement signifies a growing recognition that sustainable tax systems must account for the needs and rights of all countries, particularly those in the Global South that have historically been marginalized in international discussions. As negotiations progress, the challenge lies in ensuring that the interests of developing nations are prioritized in the face of longstanding power dynamics favoring wealthier countries.
The upcoming negotiations under the UNFCITC represent a critical opportunity to redefine how international tax cooperation is approached, particularly to prioritize human rights. The call for the OECD to engage meaningfully reflects a broader demand for accountability in global governance. As the world grapples with inequities that stem from colonial legacies, the path toward equitable taxation and respect for human dignity must be illuminated, fostering cooperation that genuinely serves all nations, especially the most vulnerable.
Original Source: taxjustice.net
