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Nigeria, Ghana, other African nations led the UN vote to assert a greater role in tax governance

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United Nations

Nigeria, Ghana, South Africa, and other countries at the UN have voted to take a greater role in international tax matters, in a move that threatens the ascendancy of the Organization for Economic Cooperation and Development (OECD), the body that has led these discussions for decades.

Developing nations have been pushing for a greater UN role after growing frustrated at global tax negotiations coordinated by the Paris-based OECD.

In 2021, more than 130 countries agreed on a landmark deal aimed at curbing corporate tax avoidance by multinationals.

But developing countries have complained they will receive relatively little revenue from the reforms compared with richer nations.

According to a Financial Times report, a vote held at the UN on Wednesday adopted a resolution that will begin the process of creating a greater role for the UN by establishing a convention on international tax cooperation.

African Countries: The measure, which was championed by African countries, was supported by 125 nations, most of which were low or middle-income countries including Nigeria, Ghana, China, India, Brazil, and South Africa.

In contrast, most of the 48 nations that voted against the measure were developed countries, including EU member states, the US, the UK, Japan, and Korea.

There were nine abstentions, including from OECD member states Norway, Iceland, Mexico, and Turkey. Chile and Colombia, both OECD members, voted in support of the resolution.

The African Union said:

The union added that it looked forward to agreeing to “an effective UN Framework Convention on International Tax Cooperation to urgently mobilize resources for our development”.

EU countries: However, an EU official said that while EU countries supported “multilateralism and effective, inclusive international co-operation in tax matters”, the bloc did not believe the proposed convention would provide “the flexibility needed to reach consensus”.

A convention “would result in the duplication of ongoing or completed international standards”, the official said.

This person voiced concern that a new UN tax convention “could imply reopening negotiations, potentially on issues for which promising outcomes already exist, and for which a considerable network of agreements ensuring tax transparency and tax fairness has been built over the years, to the direct benefit of all participating countries”.

OECD is proud of its record: Mathias Cormann, head of the OECD, said in a statement posted on X that the OECD was “proud of its record of achieving consensus-based solutions to address tax evasion and avoidance, stabilize the international tax system and support developing countries”.

The OECD remained committed to implementing the global corporate tax deal, he said.

Espen Barth Eide, Norway’s foreign minister, told the Financial Times that the country had chosen to abstain and not vote against the resolution because it wanted to “send a signal” about building bridges with developing countries.

He said:

Last year, 54 African countries successfully brought a resolution at the UN General Assembly. This recommended that the UN secretary-general produce a report assessing ways to strengthen the “inclusiveness and effectiveness” of international tax cooperation.

The report laid out three options for giving the UN more of a role on the global tax stage — two legally binding, including the framework convention, and one voluntary option.

 

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