The first round of negotiations of the United Nations Tax Convention Terms of Reference saw member states making progress, yet still divided into two clear blocs (especially regarding decision-making processes and issues like complementarity with existing tax arrangements). The Africa Group and G77 nations played a crucial role in advancing discussions on urgent protocol topics, underscoring the momentum toward a fair and comprehensive UN Tax Framework.
The discussion within the UN Ad Hoc Committee on the Framework Convention on International Tax Cooperation has progressed significantly over the past several days during their first negotiation sessions to Draft Terms of Reference, which were held in New York from 26 April to 8 May 2024. A timeline for the development of draft Terms of Reference (ToR) was approved by the Committee, with key dates set for the circulation of drafts and deadlines for comments. The Committee also adopted a provisional agenda for future sessions.
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Although all countries expressed their desires to negotiate in good faith for inclusive and effective international tax cooperation at the United Nations, it was apparent that there were still two blocs, and the OECD nations continued to play out their strategies to maintain their power in global tax negotiations. On the procedural aspect, we saw the developed countries push for a consensus-based decision-making process for the next negotiating committee, facing strong opposition to the same, they began proposing decision-making by a super majority (2/3rd of the votes).
On substantial issues, we saw renewed discussions of complementarity with existing international tax arrangements (essentially at the OECD) to avoid duplication, and calls for more technical analysis on shortcomings. Along the same lines, the higher-income countries also highlighted the importance of domestic resource mobilization and the important role of the United Nations in doing so. Significant discussions also took place regarding whether early protocols should be simultaneously negotiated with the Framework Convention itself, with the developing countries against the proposal.
Relive CESR's intervention at the UNTC Ad Hoc Committee, delivered by Fellow Pulkit Palak.
Although this stage of the process did not require any conclusive decisions to be made, the Africa Group—with commendable support from G77 nations— was able to fend off these diversion and stalling tactics and stick to their grounds. Great strides were made in identifying issues that require urgent action when discussing potential topics for early protocols. The member states also felt a strong presence of civil society. All in all, the push for action is gaining momentum as more governments are issuing strong statements emphasizing the urgent need for significant advancements towards a fair and comprehensive UN Framework Convention on Tax, along with related protocols. The recent intergovernmental tax negotiation, unique in its global scope, inclusivity, and transparency, has proven its value through the significant testimonies, lessons learned, and exchanges that governments have shared and engaged in over the past week.
Stay tuned for our updates on the next steps of negotiations!