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A pivotal moment in the fight to reshape global tax rules has arrived. The three weeks of negotiations taking place until August 16 represent an exceptional opportunity to reform our inequitable and ineffectual international tax system. CESR and civil society allies have been at the forefront of the UN Tax Convention process prior to its inception. Our team at the UN offices in New York is participating in the process and documenting all the latest developments: Here’s a quick day-by-day summary of the discussions dominating the first week of negotiations.
By: Matt Forgette and Charlotte Inge, CESR fellows
Day 1–General statements: Member States draw lines in the sand
The CESR blog has previously juxtaposed the Global South states’ substantive, ambitious approach to the Convention with the Global North states’ efforts to “water down” the process into a non-binding procedural puddle. This contrast was crystallized in the initial day of discussions, as the member states issued general statements expressing their overarching views on the process and the Terms of Reference.
The UK, US, and EU statements sought to dilute the Convention’s efficacy by emphasizing “complementarity” with the OECD tax process (the ironically designated “Inclusive Framework” proposal, which CESR has criticized for its lack of Global South inclusivity as well as its gender and racial bias). Furthermore, their statements stressed other “watering-down” strategies for weakening the Convention, such as: rejecting early protocols, insisting on a consensus-based approach to decision-making (read as de facto Global North veto power), and advocating a procedural, minimalistic approach. They emphasized tax sovereignty and domestic measures rather than the fundamental overhaul desperately needed to address our broken international tax system.
On a brighter note, voices calling for a more comprehensive and substantive process were also heard. Several countries from the Global South underscored the urgency of inclusive tax cooperation to address inequality, achieve SDGs, and finance climate measures, prioritizing issues like taxing the super-rich, curbing illicit financial flows, and linking climate action with taxation. Ghana’s statement was especially compelling, highlighting the gravity of these negotiations: “It is time things change…we have an opportunity to write history; we hold in our hands the future of international tax cooperation; let’s be very careful on how we handle it.”
Day 2–Human rights take center stage
CESR is proud of our enduring efforts to bring human rights to the forefront of global tax fora. As part of those efforts, our recent submission responding to the initial zero draft of the Terms of Reference, sought to strengthen its human rights dimension. Thus, we were pleased when the most recent draft of the Terms of Reference included explicit and specific reference to human rights alignment as a guiding principle.
Despite this, a number of countries expressed reservations about including human rights language. These protests opposing human rights language are evidence of its importance. As noted by Colombia, human rights language offers crucial guidance for designing a fair convention that addresses global inequalities. Brazil effectively argued for a broad view of human rights, noting that taxation is necessary to fulfill human rights, not just for taxpayers. Finally, CESR’s own Co-Director of Program, María Emilia Mamberti, took the floor, emphasizing the normative and universal nature of human rights that offers the ability to hold international actors accountable in our global tax system.
Day 3–Global South stands firm on substantive commitments
A Convention that will effectively redress our failing international tax structure requires robust and binding substantive commitments. CESR has previously written about how tax debates intersect with a wide range of other international issues, including climate change, gender, and the global debt crisis. Global South states demonstrated this understanding in Wednesday’s negotiations, drawing attention to these linkages. Brazil, Chile, and the Bahamas led calls for a comprehensive approach, insisting on including environmental challenges within the Terms of Reference. Brazil also reiterated its G20 proposal to move forward in taxing the “super-rich.” Additionally, China also identified the issue of reconfiguring the taxation of the digitalized economy as crucial to building a more equitable international tax architecture.
Global North states engaged in some of their usual “watering down” tactics to avoid substantive change. One watering-down strategy repeatedly utilized was attempts to rephrase certain language, such as using the verb “could” rather than “should,” to weaken substantive commitments to mere guidelines or recommendations. Countries like India, Nigeria, Kenya, Colombia, Ghana, Pakistan, and Algeria pushed back on this rewording, emphasizing the need for clear, binding commitments in the convention.
Day 4–A push for protocols
Day Four of negotiations saw protocols come to the fore of debate. Developing clear and effective protocols must be a cornerstone of the Convention’s Terms of Reference. Protocols are documents that include specific substantive obligations that implement the general objectives of the Convention. Essentially, they contain the most impactful and specific elements for international tax reform.
At this point, it should come as no surprise Global North countries opposed early protocols. US and EU arguments were mainly about procedural concerns and the logical sequence of the convention and protocols. Countries like Belgium and Lichtenstein even cited a lack of resources or capacity for simultaneous negotiations. But these arguments ring disingenuous when you consider that the states making them are some of the wealthiest and most powerful countries in the world. Furthermore, most Global North interventions failed to identify even a single substantive issue relevant for their countries to prioritize. Their time was spent explaining why substantive tax progress is impossible.
In contrast, countries like India and Chile challenged the stance that it’s too early to identify pressing issues, emphasizing that some priorities were already established in previous resolutions and analyses. Ghana also strongly countered the North’s position, asserting that excuses should not delay addressing urgent issues. It pointed out that where there’s a will to enact real change, there’s a way.
Day 5– Civil society organizations carve out space for engagement
As the week has progressed, a key issue that has emerged is the near monopolization of speaking time by member-state representatives, with civil society organizations given almost no opportunity to voice their concerns. That changed Friday, as civil society representatives from our partner organizations including TJN-A, TJN, Latindadd, Eurodad, INESC, Fundar and Desjusticia were finally afforded the opportunity to address several key issues, including the importance of combating illicit financial flows, the intersection of climate and tax policy, the need for tangible and binding protocols, the critical importance of civil society engagement within the Convention, and the necessity of enhanced transparency in tax cooperation. Critically, CESR partner organization Fundar emphasized the intrinsic connection between taxation and human rights, highlighting the necessity that human rights be embedded at the core of the convention. Desjusticia also stepped in to highlight the critical need for the convention to adopt a gender perspective to ensure more equitable tax cooperation.
In the afternoon session, human rights retook center stage. Many countries that initially opposed rights language started proposing that references to human rights and critical instruments be included in the Convention's preamble instead of the principles section. Chile, Colombia, and Brazil stepped up to defend the need to reference human rights both in the preamble and the principles.
What’s next: CESR will continue to champion human rights within the Convention
CESR's María Emilia Mamberti and Charlotte Inge.
Incorporating human rights language within the Convention’s Terms of Reference is paramount. The relationship between human rights and sustainable development through just taxation is symbiotic. Strengthening one enhances the other. States lose hundreds of billions of dollars to tax abuse each year. These revenues are critical to the fulfillment of socio-economic rights, sustainable development goals, and the right to development. Likewise, adhering to human rights principles such as the ICESCR Art. 2.1’s “obligation to dedicate maximum available resources” and the principle of common but differentiated responsibilities ensures effective and fair taxation. Because international human rights law is instrumental to tax policy, it is absolutely vital that it be mentioned explicitly within the Convention’s Terms of Reference.
Throughout the Convention process, there have been concerted attempts to replace human rights language with language referencing “taxpayer rights,” specifically the taxpayer's right to privacy. This is a dangerous effort to subvert the impact of human rights language. The vast majority of international human rights standards relevant to international tax cooperation do not relate to taxpayers’ privacy, but instead to issues such as resource mobilization, expanding fiscal space, and equality and non-discrimination. Furthermore, human rights is the correct governing law for the UN Convention because it is universal and normative in nature, encompassing taxpayers’ rights in addition to offering a myriad of other protections.
Late in the first week of negotiations, we also saw proposals to shift human rights language to the preamble, a section which, while providing important context and interpretative value, lacks the same weight as including it in the principles. As such, we welcome the positive move from member states towards including human rights in the preamble, where human rights must also remain front and center in the guiding principles to ensure that human rights remain foundational, and not a mere backdrop.
Despite these efforts, human rights language is still included in the principles within the current draft of the Terms of Reference, and CESR will be working to keep it that way. We also note with pleasure that many Latin American countries have joined civil society in promoting human rights within their interventions this week. In the coming weeks of negotiations, CESR will continue our efforts to convince delegates of the fundamental linkage between taxation and human rights.