World’s first UN Tax Convention draft is antidote to sanctions-busting financial secrecy, campaigners announce

PRESS OFFICE
The UN Secretariat Headquarters building in New York

World’s first UN Tax Convention draft is antidote to sanctions-busting financial secrecy, campaigners announce

A proposed draft for a long-discussed UN tax convention was published1 today by civil society experts from around the world, marking a milestone in efforts to overhaul the global financial system. Drawing battle lines for negotiations at the UN, the draft convention makes concrete the direction of travel for the unprecedented momentum that has developed for the UN to deliver the tax and transparency reforms that the OECD has failed to produce.

The transparency reforms set out in the draft convention are vital to eliminating financial secrecy used by Russian oligarchs to circumvent sanctions2, and more widely for tax abuse and money laundering by drug cartels, human traffickers and terrorism financers, campaigners argue. The draft convention would bring transparency to the estimated $10 trillion held offshore anonymously by wealthy individuals and the $1 trillion in profit shifted by multinational corporations across borders every year.3

Momentum to move rulemaking on global tax and finance from the OECD, where it has sat for six decades, to the UN passed a tipping point last year after the UN high level panel for Financial Accountability, Transparency and Integrity (FACTI) called for the establishing of a UN tax convention.4

  • A call to develop a UN Tax Convention was first put forward by the Africa Group at the United Nations in 2019.
  • The UN Secretary-General’s initiative in 2020 to explore responses to the Covid-19 pandemic identified a UN tax convention among the options for heads of state.5
  • The World Economic Forum in 2021 published a white paper identifying the UN tax convention among key policy pathways for an ambitious economic recovery post-pandemic.6
  • Also in 2021, the South Centre – the intergovernmental organisation of lower-income countries – published a briefing detailing a proposal for a framework UN convention on tax.7

The draft UN tax convention, published by Eurodad and the Global Alliance for Tax Justice, would:

  • Create a new global tax body at the UN
  • Replace the failed transfer pricing system
  • Create strong links to development, human rights, equality and environmental protection.

Welcoming the proposed draft convention, Alex Cobham, chief executive at the Tax Justice Network, said:

“We must reprogramme the global financial system to protect people’s wellbeing and livelihoods instead of protecting the wealthy in the shadows. A UN Tax Convention on these terms represents the world’s best chance to put an end to the anonymous ownership of wealth – and with it much of the tax abuse, corruption and inequality that it drives all around the world.”

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Read the UN Tax Convention draft here.

Read the Global Alliance for Tax Justice and Eurodad’s press release here.

Notes to Editor

  1. The draft UN tax convention is available here.
  2. Our briefing on the obstacles to implementing sanctions against Russian oligarchs and 10 measures to cut through the financial secrecy is available here.
  3. For more information on the scale of global tax abuse, read the State of Tax Justice 2021 here.
  4. Read more about the UN High Level FACTI panel’s report here.
  5. The UN Secretary-General’s ‘Financing for Development in the Era of COVID-19’ initiative is available here.
  6. The WEF’s white paper is available here.
  7. The South Centre briefing is available here.