Global Tax Justice on Horizon with UN Tax Convention Draft

In what could be a watershed moment for the international community’s strive toward equitable taxation, the United Nations is on the cusp of adopting a transformative framework that promises to overhaul the prevailing global tax regime. The UN Tax Convention draft is receiving widespread attention ahead of its final vote this Friday in Nairobi, Kenya.

The convention draft, fervently supported by civil society organizations, is being hailed as a historic effort to create a more just and inclusive global tax system. Spearheaded by countries of the Global South and propelled by a sense of urgency to curb systemic financial inequities, the document aims to tackle the rampant issues of tax evasion, illicit financial flows, and disproportionate tax burdens on less affluent nations.

The latest version of the draft terms of reference (ToR) for the convention, under negotiation since February 2024, articulates an ambition to foster a universal framework for international tax cooperation. Addressing the systemic biases that have traditionally favored affluent nations and multinational behemoths, the potential reform is a significant move toward realigning the scales of fiscal justice.

“The draft represents a bold move to rebalance the international tax playground while asserting the imperative roles of sustainability and accountability,” expressed Fred Njehu, Greenpeace Africa’s Political Advisor. He accentuated that its adoption could cement a new epoch where global tax systems not only generate adequate resources for development but also bring tax dodgers, especially polluters, into legal compliance.

Despite the draft falling short of some expectations set by developing nations, its proponents impress upon the international community to endorse this formidable draft. The mounting pressure to bring multinationals and the ultra-rich into a fair tax fold cannot be overlooked as the world grapples with widening inequality and the need for inclusive growth.

The UN Tax Convention draft embeds within it commitments to equitable taxation, preventing tax-financing illicit outflows, and meaningfully involving developing countries within the decision spheres previously dominated by the more affluent blocs.

Greenpeace Africa has been vehement in its call for governments to back the draft. With the final vote imminently approaching, the adoption of the ToR is not only a stride for global tax realignment but also for securing foundational resources that enable robust health systems, education, infrastructural development, and vigorous climate action across the developing world.

As global eyes turn towards Nairobi, the prospect of a more just and structured tax future hangs in the balance, with the outcome of the Friday vote holding potential to reshape economic fairness on a global scale.