In a historic move, the United Nations General Assembly has adopted a resolution to establish a new framework convention for global tax cooperation, shifting decision-making power from the Organization for Economic Cooperation and Development (OECD) to the UN.
The resolution, sponsored by the African Union and spearheaded by Nigeria’s UN Ambassador Tijanni Mohammad-Bande, was approved by a resounding two-thirds majority, with 125 countries voting in favor.
Only 48 countries voted against the resolution, and 9 abstained. Notably, the United States, the United Kingdom, and all EU member states opposed the measure.
The vote represents a significant breakthrough in the decades-long struggle for a more equitable and inclusive global tax system. Previous attempts to bring tax rulemaking under the UN’s purview were unsuccessful, with the last significant effort failing in the 1970s.
The resolution’s adoption is a direct response to the growing discontent among developing nations regarding the OECD’s dominance in shaping global tax policies. Critics have long argued that the OECD’s exclusive club of wealthy countries fails to adequately represent the interests of the majority of the world’s nations.
The resolution’s passage is being hailed as a victory for developing countries and civil society organizations that have tirelessly advocated for a more inclusive approach to global tax governance. The new framework convention is expected to address critical issues such as tax avoidance, profit shifting, tax havens, and base erosion, which have disproportionately impacted developing economies.
The overwhelming support for the resolution demonstrates the urgent need for a more equitable and participatory global tax system. The UN’s involvement in tax rulemaking is a positive step towards ensuring that all countries have a voice in shaping the rules that govern global taxation.
The Director of the Intergovernmental Group of Twenty-Four, G-24, Iyabo Masha, commended the adoption of the resolution, noting that “the momentous resolution signifies the commencement of a transformative journey toward a new tax agreement crafted collectively by all stakeholders, encompassing both developed and developing nations, under the auspices of the United Nations”.
Alex Cobham, Chief Executive at the Tax Justice Network, said:
“This is a historic victory delivered by the countries of the global South, for the benefit of people all around the world. Tax havens and corporate lobbyists have had too much influence on global tax policy at the OECD for too long. Today, we start to take back power over the global tax rules that affect all of us.
“The great majority of countries have declared today that they are ready to move on from the OECD, and will start negotiating global tax rules at the UN instead. We invite all countries to join in these negotiations and begin a new chapter of economic prosperity for people everywhere.”
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