Author: Brett Hurll 23 November 2023
The global landscape of international taxation is undergoing
a significant transformation, as developing countries intensify their efforts
to secure a more prominent role for the United Nations (UN) in shaping
international tax policies. This shift is challenging the long-standing
dominance of the Organisation for Economic Co-operation and Development (OECD)
in setting the fiscal agenda. In this report, we will explore the motivations
behind this push, the arguments for and against it, and the potential consequences
for global economic stability and development.
The Current State of International Tax Governance
For decades, the OECD has been the primary driver of
international tax policy. Its initiatives, including the Base Erosion and
Profit Shifting (BEPS) project, have set the standard for global tax rules.
However, this dominance has been a source of contention, especially among
developing countries who feel that their voices have been marginalized in
shaping these policies.
Developing Countries' Push for a Greater UN Role
Developing countries have rallied behind the idea of a more
inclusive international tax regime under the UN's auspices. Their motivations
are multifaceted. First, they argue that a UN-centric approach would be more
democratic and representative, allowing for a wider array of voices to be heard
in shaping global tax rules. Second, they contend that such a shift would lead
to fairer and more equitable outcomes, with a greater focus on addressing tax
avoidance and revenue leakage.
The negotiations within international forums have been
heated. The UN Tax Committee has been a focal point for discussions on this
matter. Developing countries have put forward proposals to create a new
international tax convention that would place the UN at the center of global
tax governance. Developed countries, many of which are OECD members, have
raised concerns about the feasibility and effectiveness of such a shift.
Arguments For and Against a UN-Centric Approach
Arguments For a UN-Centric Approach:
Democracy and Representation: Developing countries argue
that the UN, with its universal membership, is better equipped to ensure that
all countries have a voice in shaping international tax policies. They
emphasize that decisions should not be dictated solely by a club of developed
Equitable Outcomes: Proponents contend that the UN
would prioritize addressing tax avoidance and profit shifting, resulting in a
fairer distribution of international tax revenues. This, they argue, would
contribute to economic development in low-income countries.
Multilateral Cooperation: Advocates point to the
success of multilateral initiatives in addressing global challenges, such as
climate change and health crises. They believe a UN-centered approach would
enhance cooperation among nations.
Arguments Against a UN-Centric Approach:
Effectiveness and Consistency: Skeptics argue that
the OECD's experience and technical expertise in tax matters have led to more
effective policies. They question whether the UN can match the OECD's level of
expertise and consistency in international tax rules.
Complex Negotiations: Opponents express concerns
about the complexity of negotiating tax matters within the UN's framework,
given its vast membership and diverse interests. They fear that progress could
be hindered by bureaucratic hurdles.
Economic Impact: Some argue that a shift toward a
UN-centric approach could disrupt global economic stability by introducing
uncertainty into the tax landscape. Businesses might face challenges adapting
to a new system.
The Role of Non-State Actors and Historical Precedents
The evolving landscape of international taxation also raises
questions about the role of non-state actors, such as multinational
corporations and civil society organizations. These entities have historically
influenced tax policies, and their positions may be impacted by a shift towards
Historical examples of multilateral tax cooperation, such as
the Double Taxation Conventions and the Multilateral Convention to Implement
Tax Treaty Related Measures (MLI), offer insights into the potential
effectiveness of a UN-centered approach. The success of these conventions
suggests that multilateral cooperation can yield positive outcomes in the field
Implications for Global Economic Stability and
The potential consequences of a shift towards a more
UN-centered international tax regime are far-reaching. The impact on global
economic stability and development hinges on the ability of the UN to
effectively coordinate international tax policies and ensure equitable
While proponents argue that this shift could lead to a
fairer distribution of tax revenues and foster economic development in
low-income countries, opponents worry about potential disruptions and
challenges to established tax norms.
The push by developing countries to secure a bigger
international tax role for the United Nations represents a significant
reconfiguration of the global tax landscape. This shift challenges the OECD's
historical dominance and raises fundamental questions about the future of
international tax governance.
The outcome of these ongoing negotiations and the subsequent
impact on global economic stability and development will be closely watched by
governments, businesses, and civil society alike. Whether the UN can
effectively navigate the complexities of international tax cooperation remains
a critical question in this evolving debate. The balance between inclusivity
and effectiveness in global tax governance will shape the course of
international taxation in the years to come.
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