Taking a critical look at the OECD Global Tax Agreement through a human rights lens

From November 24 to November 25, 2022, CESR participated in a two-day workshop in Tunis on the OECD’s Global Tax Agreement (GTA) hosted by the Tunisian Observatory of the Economy (OTE) and Tax Justice Network Africa (TJNA).

The purpose of the workshop was twofold. First, to act as a platform for capacity-building for debt justice and tax justice activists in Tunisia and the region (both SWANA and Africa at large) to have a better understanding of how Pillar I and Pillar II of the GTA function and what their implications are, especially for African countries that are signatories to the deal. Second, to create a space for critical reflection, dialogue, advocacy and mobilization in light of the serious shortcomings of the GTA from a tax justice and human rights perspective.

OTE and TJNA invited CESR in light of its expertise on linking tax justice and human rights. Our Program Associate Ohene Yaw Ampofo-Anti, provided a human rights critique of the GTA, which highlighted:

1. The principle of maximum available resources (MAR). In this respect Pillar 1 falls foul of this principle because the threshold for taxing digital companies is far too high (20 Billion Euros) and the formula for taxation (such as only taxing 10% of profit margins) is wholly inadequate and totally unfit for purpose from a human rights perspective. Pillar 2 fouls fall of this principle as well because as CESR we contend that 15% will become a ceiling not a floor and encourage a race to the bottom.
2. The right to development and the right to self-determination including the right to exploit one’s natural resources.
3. The right of access to information and the need for transparency due to the opacity of the GTA and related tax agreements (such as investment agreements between Global South countries and MNCs).
4. Racial justice and reparations - the SR on Racism has said a just and equitable global economic order is part of the duty to provide reparations for the contemporary effects of slavery, colonialism and apartheid.
5. The need for a decolonial approach to transform the colonial nature of African economies (this aligns with degrowth) and the need to decolonise the global economy.
6. Climate justice and environmental rights - resources need to be mobilized to ensure mitigation, adaptation and loss and damage.
7. The need for fiscal policy which ensures substantive equality and a redistribution of wealth and resources whilst tackling intersectional discrimination.
8. Extraterritorial obligations and the need for global solidarity to enable the realization of economic, social and cultural rights. 

In conclusion, he noted how if a UN Tax Convention is established it would be important for it to expressly include these and other related human rights principles which would ensure a far more just and equitable international tax regime than the one established by the GTA.