On Monday (3), UN member states began “historic” talks to draft the first “universal” tax cooperation convention for 2027, aiming to curb tax evasion and fairly charge multinational companies and the wealthiest individuals.
“This is not just a technical exercise, but a moral imperative,” said the newly appointed chairman of the negotiating committee, Egyptian Ramy Youssef.
Youssef argues that the billions of dollars lost every year due to profit shifting, “pernicious tax competition and illegal financial flows” deprive “particularly, the most vulnerable countries of critical resources.”
To reach the level of these talks, under pressure from African countries seeking a place at the negotiating table for international tax rules – while demanding a reform of the international financial architecture – the UN General Assembly adopted the idea of a “framework convention” of this kind in 2023 so that tax cooperation is “fully inclusive and more effective.”
The negotiating mandate was finally adopted at the end of last year. In a historic step, the G20 agreed at a meeting in Brazil to cooperate, so that the super-rich pay taxes “effectively.”
To French economist Gabriel Zucman, promoter of the initiative, a 2% tax on the assets of the super-rich could generate resources in the order of US$250 billion a year to be invested in tackling social and environmental challenges.
According to the UN, the detailed purposes will be “to guarantee a fair division of tax rights, particularly through the equitable taxation of multinational companies” and “to combat tax evasion and avoidance by wealthy individuals”.
As stated by the British NGO Tax Justice Network, governments lose US$492 billion in taxes every year due to the use of tax havens.
Almost half (43%) of these losses are possible thanks to the tax policies of eight countries (Australia, Canada, Israel, Japan, New Zealand, South Korea, the United Kingdom, and the United States).
*With AFP
