Last month PSI sent an open letter to the UN Secretary-General (UNSG) Antonio Guterres about the UN taking a leading role in international tax cooperation. Thanks to active contributions from affiliates,  the open letter gather over 200 signatures from unions across the globe.

Our efforts have now been effective: the UNSG’s team published a report to the UN General Assembly which endorses key positions of trade unions.

The report unambiguously recognises the need for all countries to be included equally in making tax rules, and for a fairer division of taxing rights between residence and source countries. Importantly, it frames taxation as an issue of sustainable development, not just of facilitating private capital flows.

The report does not specifically take position on unitary taxation, tax competition, a 25 per cent effective minimum tax rate or public country-by-country reporting, as trade unions have urged. 

The report proposes three options for UN member states to consider: 

1. A legally binding multilateral convention on tax, of a regulatory nature and which would determine the substance of tax rules. This could be very comprehensive or just focus on particular tax issues. 

2. A legally binding framework convention on international tax cooperation, which sets out the aims and institutions of tax cooperation. This would not deal with the substance of tax rules but could give rise to other legal instruments which do, for example in the form of protocols. 

3. A non legally binding framework for international tax cooperation, which would set up an agenda for coordinated actions at international, national, regional and bilateral level.

Option 3 should be opposed because it would be a talking-shop with no legal force.

Option 1 requires a strong degree of consensus between all UN countries which at this stage may not be realistic. It also has the disadvantage of not being sufficiently flexible to adjust to various implementation challenges.   

Option 2 is the global tax governance that unions have called for. As suggested by the UNSG report, option 2 is likely to ultimately be combined with option 1 with the adoption of substantive norms in the form of protocols.

Next steps 

The report will  be discussed at the UN General Assembly on 5-19 September 2023. Unless member states are able to already decide on a specific option, an ad hoc intergovernmental committee could then be set up with a view to further discuss the various options.

Ahead of the September General Assembly, we strongly encourage unions to demand their governments support an effective and inclusive tax governance. You will find attached a template letter which you may use as a source of inspiration to contact your government representative without further delay, and in any event before or around 5 September. On this link, you can find the name and contact details of the UN representation of your country (‘Member States maintaining permanent missions at Headquarters’). We also advise copying your Finance Ministry in your mailing.  

We would be most grateful if you could let us know when your organisation has contacted your government representatives so that PSI can also make the necessary follow up. 

Please do not hesitate to contact us if you need further information at spicard@progressivepolicies.eu