UN: United Nations General Assembly votes overwhelmingly to begin historic, global tax overhaul

A historic vote at the UN General Assembly today saw countries decide overwhelmingly to begin the formal negotiation of a UN framework convention on international tax cooperation. Over the next two and a half years, delegates will work together to set new rules and standards relating to both corporate and individual taxation, and to design a new framework body that will house future ‘Conferences of the Parties’ in order to address new tax challenges as they arise in future.

Hon. Irene Ovonji-Odida, chair of Tax Justice Network and a member of the AU/ECA High Level Panel on Illicit Financial Flows from Africa (also known as the Mbeki Panel), said:

“This is a watershed moment. The world has lived through a century of the international tax rules being set by a small group of countries – first at the League of Nations, and then at the OECD – and the effect has been an explosion in the tax revenues lost to the abusive practices of multinational corporations and wealthy individuals hiding their assets offshore. Ordinary citizens, workers and domestic companies everywhere are the losers including those from OECD countries. Now, finally, we will all negotiate together to set rules that work for everyone. Everyone except the tax abusers!”

The resolution1 establishes a pattern of three negotiating sessions a year, in New York and Nairobi, running from 2025 to mid-2027. The terms of reference2 for the negotiations were agreed earlier this year, and were warmly welcomed by tax justice activists. Central objectives include the establishment of “a system of governance for international tax cooperation capable of responding to existing and future tax and tax-related challenges on an ongoing basis”, and which is “fully inclusive and effective in terms of substance and process.” The countries of the world committed to ensure a “fair allocation of taxing rights, including equitable taxation of multinational enterprises”, and to address “tax evasion and avoidance by high-net worth individuals, ensuring their effective taxation.”

The August 2024 vote on the terms of reference had passed with the support of all but 8 blocker countries: the UK and US, plus Australia, Canada, Israel, Japan, New Zealand and South Korea. The recently published State of Tax Justice 2024 showed that these countries, with just 8 per cent of the world’s population, are responsible for some 43 per cent of the global revenue losses caused by cross-border tax abuse.3

In the final vote, just one country joined the blockers: Argentina, which had already delivered its now traditional speech to disassociate the country from any language referencing globally agreed measures such as Agenda 2030 and the Sustainable Development Goals. The EU as a bloc abstained, after calling and losing two amendments that would have required agreement on strong consensus. This was also the issue on which the US called the main vote, rather than allowing the resolution to pass by unanimous consensus.

Nigeria, on behalf of the Group of African States, was clear that the clear position of the ad hoc committee that agreed the terms of reference, was that decision-making should be agreed in the first, organisational session of the full negotiations. This was the position that carried the huge majority support for the full resolution.

Sergio Chaparro Hernández, Tax Justice Network’s International Policy and Advocacy lead, said:

“Unlike in the OECD negotiations, the world has seen a process in which all countries have had every guarantee to express their views in a transparent manner. This path must continue, without threats or vetoes that if the positions of any party are not adopted then they withdraw from the process. Bringing the light of democracy from the United Nations to the discussion on international taxation implies accepting that from the rules of procedure, can derive decisions that prioritise the interest of global majorities over that of a group of countries that are defending the interests of their elites over those of their own people. We call on states to remain engaged in this historic process with a truly constructive approach.”

Alex Cobham, chief executive at the Tax Justice Network, said:

“History has been made today, and we can celebrate a great step forward for tax justice. But we should also be concerned about the votes cast by OECD member countries. The European Union and the UK are among the biggest revenue losers due to the OECD’s repeated failures. The people of the UK and EU are consistent in demanding that their governments take action against tax abuse, and invest in better public services. And so it’s extraordinary to see these governments once again refusing to commit to global progress. But the negotiations are going ahead, and I’m certain these countries will be around the table – because ultimately they too know just how much it will be worth, to make the international tax rules effective. Some countries will seek to use a call for ‘consensus’ as a way to obtain an effective veto against progress – but it is clear that the majority of countries are committed to going forward, and will not allow such a destructive measure.”