Hundreds of union leaders globally have written to the United Nations asking it to step in and provide a forum for meaningful global tax reform after the Organisation for Economic Co-operation and Development (OECD) was accused of pushing for landmark tax transparency legislation to be scrapped.
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Public Services International has published an open letter to UN leaders and ministers meeting in New York this week, urging the organisation to take the lead on global tax matters.
The letter calls for the establishment of a UN Framework Tax Convention as a viable solution to resolving international tax governance issues, after the OECD reportedly discouraged Australia’s government from introducing legislation which would have required thousands of multinationals to publicly reveal where they pay – or don’t pay - tax.
PSI has also proposed a minimum effective tax rate of 25%
Advocates believe that such a convention would provide a fair, accountable, and transparent platform for global tax decision-making, ensuring an equal playing field for all countries.
PSI and others’ letter pointed to the OECD's ‘inability to foster equitable tax cooperation’, citing its inclination towards corporate interests over social welfare. The Australian bill, which the OECD is alleged to have attempted to derail, would expose unprecedented details about companies’ tax affairs in each country they operate. Such a move could help clamp down on tax avoidance by forcing companies to reveal how much of their revenues are booked in all jurisdictions and increase public scrutiny over excessive corporate profits which the IMF says are fueling inflation.
The call to action primarily advocates for multinational enterprises to be taxed as single global entities, urging the dismissal of current flawed transfer pricing rules. PSI has also proposed a minimum effective tax rate of 25%, alongside stringent standards for public country-by-country reporting – recommendations which have been endorsed by global unions.
Rosa Pavanelli, General Secretary of PSI, said: “Our members are frontline workers endured severe understaffing and crumbling services through the pandemic; all while continuing to pay taxes at a rate far higher than many tax-dodging multinationals. We deserve leaders who will stand up for public services, for taxpayers and for small and medium sized businesses who pay the price for this broken global tax system.
“Just as we mustn’t accept climate rules written by big emitters, we must no longer accept tax rules written in the interest of the world’s leading tax dodgers. That’s why it’s high time for global tax policy to be taken out of the hands of multinationals and corporate captured institutions such as the OECD. Countries like Australia must persist in their commitment to change the game, undeterred by organisations that prioritise corporate interests. As with climate talks, the UN must become the forum where vital new tax measures are developed and encouraged – not undermined.”