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UN calls for end to OECD control of global tax policy

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The United Nations is wrestling with the OECD for global control over how new rules will be constructed to regulate the formation of a new corporate tax policy (File photograph)

Human rights investigators at the United Nations have warned the Organisation for Economic Co-operation and Development that their controversial global minimum tax plan risks violating human rights.

The UN experts have demanded answers, claiming the potential for race, ethnic and gender discrimination, in a letter sent last month, and just commented on by the Tax Justice Network.

The UN experts, who have special mandates to investigate human rights violations, want the OECD to prove they have accounted for the affect of their proposals on human rights.

Economists, unions, NGOs and country reports have been highly critical of the OECD’s handling of global tax.

The UN Secretary-General, António Guterres, was blunt in his criticism of the OECD this summer, saying it was time the UN took over global tax. Nigeria and other African nations have put forth proposals that have won widespread support from among UN countries.

In November, a UN vote saw an overwhelming agreement to take the development of global tax rules away from the OECD, some 50 years after the last attempt to do so failed. The UN said its plan would give developing nations a greater say in global tax rules.

Meanwhile, the most recent letter is part of continuing correspondence between officials from the UN’s Office of the High Commissioner for Human Rights and the OECD secretary-general.

Luke Holland, network and partner relations manager at the Tax Justice Network said there is little official scrutiny of the OECD’s handling of the global tax issue (Photograph supplied)

Luke Holland, TJN network and partner relations manager, welcomed the formal challenge: “This is a significant moment. The OECD has sought to undermine the UN in recent years, questioning its suitability to host international tax discussions. But there has been surprisingly little official scrutiny of the OECD itself.”

He said the OECD has refused to publish country-level estimates of the impact of its proposals, despite having preferential access to data that non-member countries are denied.

He added: “That leaves us all in the dark about the extent to which people may suffer from the systematically biased character of the OECD’s proposals.

“Now, the UN special mandate holders are demanding that the OECD, at a minimum, demonstrate that they have assessed the human rights implications of their proposals, and explain the continuing exclusion of non-member countries.”

The TJN view is that the OECD’s role in global tax policy setting is inappropriate, and the UN is best placed to support a more inclusive approach.

Maria Ron Balsera, director of programme at the Centre for Economic and Social Rights (Photograph supplied)

TJN quotes Maria Ron Balsera, director of programme at the Centre for Economic and Social Rights, the international non-governmental organisation, saying that tax abuse leads to human rights abuse.

Dr Ron Balsera said: “It is time to revamp the biased economic system maintained by the OECD which continues the colonial extraction of wealth and resources from the global south. We need a rights-based economy, an economy that works for the people and the planet.

“We need transparent, democratic and rights-aligned tax reforms to unlock the maximum available resources for the full realisation of human rights. The two-pillar solution is far from redressing base erosion and profit shifting.

“Without a human rights impact analysis, international financial institutions, like the OECD, will carry on protecting the interests of corporations and the wealthy, creating and exacerbating gender, racial and social inequalities within and between countries”.

Ohene Yaw Ampofo-Anti, a programme associate at the Centre for Economic and Social Rights and a Sonke Health and Human Rights Fellow (Photograph supplied)

Ohene Yaw Ampofo-Anti, programme associate at CESR, said: “This communication comes at an historic juncture to finally transform the global financial architecture from a system which operates to benefit political elites and rich countries to a human rights-aligned global economy which secures a dignified life for all within planetary boundaries.

“The necessity of global tax reforms to address the polycrisis we face and its impact on human rights has never been clearer. Moreover, this communication is a poignant reminder of how the current international tax system is a colonial hangover with racially discriminatory impacts both within and between countries.”

The Tax Justice Network said: “In recent years, tax haven countries including Ireland, Switzerland, the Netherlands and the United Kingdom have all been challenged by UN human rights treaty bodies over their facilitation of cross-border tax abuse.

“These countries, all of which are OECD members and none of which are included in the OECD’s tax haven blacklist, are among the countries seeking to block progress towards the framework convention at the UN.”

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Published January 17, 2024 at 8:00 am (Updated January 18, 2024 at 8:08 am)

UN calls for end to OECD control of global tax policy

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