United Nations members are set to vote on a draft tax resolution proposed by the 54 members of the African Union at the UN General Assembly in New York, United States, on Wednesday.
Backed by developing nations, the draft resolution paves the way for a new UN convention on global tax policy. If adopted, it will open the door for intergovernmental discussions on global tax affairs.
The Africa Group is hoping to pull the rug out from under the feet of traditional institutions responsible for organizing international tax issues and world trade, such as the Organisation for Economic Co-operation and Development (OECD), which is controlled by a number of high-income economies. The resolution suggests giving the role to a new UN convention, where developing countries can take part in the decision-making.
According to the advocacy group Tax Justice Network (TJN), the draft resolution will grant the UN the power to “monitor, evaluate and decide global tax rules."
“On the table is the creation of a UN tax convention which would overhaul global tax rules to bring an end to global tax abuse by multinational corporations and the superrich,” the TJN said in a statement. “Proposals for a UN tax convention have gained wide support in recent years from governments, leading global institutions, civil society groups and the UN general secretary himself.”
In support of the African resolution, former South Africa President Thabo Mbeki, who heads the influential High-Level Panel on Illicit Financial Flows out of Africa, emphasized its importance. He went on to call on UN members to vote in favor, pointing out the OECD should be limited to a “supportive role."
“I strongly urge all the friends of Africa to resist any attempts to reverse agreement on this issue,” Mbeki said in a statement. “While the OECD has played an important role in these areas, it is clear after ten years of attempts to reform international tax rules that there is no substitute for the globally inclusive and transparent forum provided by the United Nations.”
Calls for the development of a UN Tax Convention were initially made by the Africa Group at the UN in 2019. During the past three years, similar calls have been repeatedly made on different international stages.
In May, finance ministers of the Economic Commission for Africa called on the United Nations to launch talks to broadly address the threat of cross-border tax abuse, including by wealthy individuals and multinational businesses.