Convening organisations: European Network on Debt and Development (Eurodad), EU Tax Observatory (EUTO), Global Alliance for Tax Justice (GATJ), ICRICT (Independent Commission for the Reform of International Corporate Taxation), Tax Justice Network, World Inequality Lab
Call for papers
At the end of 2022, the member states of the United Nations passed unanimously a resolution to begin intergovernmental discussions on proposals for a new international framework for tax cooperation under UN auspices that could open the door to major reforms addressing the shortcoming of our international tax system.
Despite a decade of global tax reform, a report drafted by the UN Secretary General outlined how the current tax rules fails to address inequality both within and between countries.
European countries now have a major opportunity to take part in the negotiation of a UN tax convention that could make powerful strides against the scourge of tax abuse, which contributes to damaging inequalities across the continent and beyond. But despite public demands for progress against tax abuse, there are serious questions over whether European governments will engage fully in the process. The important role of some European countries in facilitating cross-border tax abuse may form part of the explanation; but citizens of all European countries stand to gain from progress.
This two-day conference will bring together researchers from across Europe and beyond, to address questions of inequality and the global tax architecture and question the benefits for Europe and beyond. Societies across Europe face dramatic inequalities of income and wealth, undermining human wellbeing and hitting marginalised groups – including women and those facing overlapping inequalities – the hardest. A major component of these uncontrolled inequalities is the failure of governments to tackle tax abuse by elites and major corporations. As a result, tax systems across the continent fail to deliver direct redistribution to damp down extreme wealth and incomes, and also fail to generate the revenues needed to tackle poverty.
The UN Secretary-General has produced a report setting out the main options for reform, following broad consultation. The central option is for a framework convention on tax. This could deliver both concrete progress on specific areas to curb cross-border tax abuse (estimated to cost the world almost half a trillion dollars annually) and other illicit financial flows, and also create a new governance structure for the negotiation of international tax rules.
The current failures in international rules on tax and financial transparency represent a major obstacle to progressive taxation in countries at all levels of per capita income, and therefore contribute powerfully to needlessly high levels of within-country inequality. In addition, the failures are responsible for deeper inequalities in taxing rights between countries, because they result in systematically higher tax losses for lower-income countries as a share of current tax revenues. Establishing the international basis for more effective national taxation is therefore a crucial step to curbing inequalities around the globe. Confronting the climate crisis also requires more effective tax systems, whether in terms of reducing the worst wealth inequalities that appear to be associated with the highest emissions, or ensuring any emissions pricing is effective and fair, for example.
There are three key questions to resolve over the coming period. First, the substance of the convention: what is the appropriate governance structure for future rule-setting that the convention should establish, and which specific areas should be addressed within the convention or its protocols? Earlier work such as Tanzi (1999) outlines the broad scope of potential responsibilities, and a forthcoming report from the EU Tax Observatory will outline some priorities to be addressed globally. Ryding (2022) provides a draft convention text which identifies a range of key issues, and Chowdhary & Picciotto (2021) explore the opportunities of a framework convention in particular. But there is not yet an extensive literature upon which policymakers and negotiators can readily draw to develop a comprehensive agenda, either on specific issues or on the eventual governance structure.
Second, what modalities should be adopted for the negotiations? It seems likely that an ad hoc intergovernmental working group will be established to take these decisions in 2024. The UN Secretary-General’s report points in this direction but does not enter into specifics, while independent analysis (Hugo & Løvold, 2022) indicates a range of possible paths to agreement, as well as multiple types of instrument that could be agreed.
The final question is political: with the OECD having largely led the way in setting international tax rules since the 1960s, will its member countries – including those of the EU – accept the shift to a globally inclusive alternative framework? If they oppose it, what are the likely outcomes? Given the central responsibility for cross-border tax abuse of European countries and their dependent territories, what are the likely outcomes of an agreement that includes most European countries, and one that goes ahead without them?
The Africa Group has led the process so far at the UN General Assembly, with strong G77 backing, and the region has detailed common positions that are now being updated by the relevant continental institutions and date back to the original report of the High Level Panel on Illicit Financial Flows out of Africa. The Colombian, Chilean and Brazilian governments are leading a process to explore regional positions, through the recent creation of the Regional Tax Cooperation Platform for Latin America and the Caribbean.
Some OECD members have been the most vocal in opposition (the US, Japan and South Korea in particular). But in Europe, which dominates the OECD’s membership, there has been an almost complete absence of engagement – even as the UN process has moved ahead with growing momentum.
EU countries have also been almost silent, despite being among the largest losers from cross-border tax abuse and often presenting itself as a driver of change. Of the 38 OECD member countries, 22 are EU members. Of the remaining 5 EU members, 3 are in the process of accession to the OECD. The European Parliament has called for the EU and member states to engage fully in the process to negotiate a UN tax convention, but so far to no avail.
This international policy research conference will address these three questions. The convening organisations now issue a call for papers that explore one or more of these questions. The underlying emphasis should be on improving the prospects for European engagement in a UN process that can support meaningful progress against tax abuse in European countries and globally, to curb inequalities within and between countries, and to strengthen states’ ability to respond to the climate crisis.
We invite research papers or panel proposals focused on any aspect of this situation, including but not limited to:
- The impact of cross-border tax abuse on overlapping inequalities, in European countries and elsewhere
- The potential priority reforms of a UN tax convention, and their impact for European countries and others
- The politics of UN vs OECD tax processes, and issues in negotiating a UN tax convention
- The role of tax in responding to the climate crisis, and the implications for necessary international arrangements
Alongside new research, the conference will include high-level policy panels featuring speakers from the EU, international institutions and global civil society, addressing the future of the international tax architecture.
Those interested to contribute to the conference are requested to send 500-word abstracts (or full papers) by Monday 23 October. Submissions will be considered by a panel from the convening organisations, with decisions communicated in November. Full papers will be required to be submitted by end-January 2024.
Please send any queries to [email protected].
Chowdhary, A. & Picciotto, S., 2021, ‘Streamlining the Architecture of International Tax through a UN Framework Convention on Tax Cooperation’, Tax Cooperation Policy Brief 21, https://www.southcentre.int/tax-cooperation-policybrief-21-november-2021/.
Hugo, T. & Løvold, M., 2022, A UN Tax Convention? Exploring the merits and feasibility of a new international convention on tax and financial transparency, Norwegian Academy of International Law, https://intlaw.no/en/reports/report-a-un-tax-convention/.
Ryding, T., 2022, Proposal for a United Nations Convention on Tax, Eurodad/Global Alliance for Tax Justice, https://globaltaxjustice.org/news/ground-breaking-civil-society-proposal-for-a-un-convention-on-tax-is-published/.
Tanzi, V., 1999, ‘Is There a Need for a World Tax Organization?’, 173-186 in A, Razin & E. Sadka, The Economics of Globalization: Perspectives from Public Economics, Cambridge: Cambridge University Press.