Inclusive and Effective International Tax Cooperation: Views From the Global South

In 2023, demands for the United Nations to take up a larger role in global tax governance are louder than ever before. Nevertheless, there is not yet a global consensus on the way forward. In this paper we investigate how the United Nations (UN) could create a more inclusive and effective space for international cooperation. We define the current governance architecture as an ‘international regime complex’, emphasising the fact that several institutions govern international tax cooperation, without there being a hierarchy between them. Based on evidence drawn from interviews with 33 government officials (mainly from lower-income countries) conducted from May to July 2023, and from literature reviews on global governance arrangements in other policy areas, we discuss what role the UN could take in this international regime complex.

Based on evidence drawn from interviews with 33 government officials (mainly from lower-income countries) conducted from May to July 2023, and from literature reviews on global governance arrangements in other policy areas, we discuss what role the UN could take in this international regime complex.

First, we take stock of interviewees’ views on the current state of global tax cooperation, both in procedural and substantive terms. As expected, many do not consider current decisionmaking processes as fully inclusive, and do not always find international standards appropriate for their countries. Nevertheless the picture is nuanced, and there is disagreement on the desired future evolution of tax cooperation. The fact that many other policy areas face similar problems also suggests that there is no simple solution.

Further, we identify four specific issues of global tax governance that present challenges to many lower-income countries – negotiating capacity, language of negotiations, agenda-setting, and cooperation between political and technical stakeholders. We map out how these issues exist and are dealt with in other regimes, and draw implications for the UN’s future role. To enhance the inclusiveness and effectiveness of international tax cooperation, the UN should invest in building negotiating capacity in lower-income countries, and build a regime that supports more variation in priorities and implementation capacity. It should also consider the differences across countries regarding the capacity to negotiate in English and work with English documents. To support agenda-setting by groups other than the OECD and G-20, the UN can collaborate with regional tax organisations, and draw from regional agreements in the elaboration of policies. Finally, a particular challenge the UN needs to address is the provision of an inclusive space in which countries can come to political agreements that are informed by experts.