“It is now seven years since the world adopted the first-ever target to reduce illicit financial flows, including corporate tax abuse, following the AU/ECA High Level Panel on Illicit Financial Flows out of Africa report.
This remains of critical importance with regard to the task of strengthening global efforts in support of the Sustainable Development Goals 16.4 target.
A key area identified by the High-Level Panel on IFFs from Africa was the lack of an inclusive architecture for international tax cooperation. Reflecting on the continuing urgency of addressing this gap, as well as the continuing leadership of African countries, I was delighted to welcome in May of this year the ECA declaration of African Finance Ministers – which called for the immediate start of negotiations on a UN tax convention.
Such an instrument has the obligation to set ambitious global standards; to create the mechanisms for transparency and accountability to deliver on the illicit financial flows target; and to establish a globally inclusive intergovernmental tax body under UN auspices, which the G77+China has long called for.
This September, UN Secretary-General Antonio Guterres pledged his Office’s support of such negotiations. In that report, he highlighted the lack of inclusivity for every single current instrument and forum that exists in relation to international tax and transparency. I understand that the current discussions at the UN General Assembly Second Committee have proceeded well, with only a handful of countries with remaining concerns at the stage prior to adoption. I strongly urge all the friends of Africa to resist any attempts to reverse agreement on this issue.
While the OECD has played an important role in these areas, it is clear after ten years of attempts to reform international tax rules that there is no substitute for the globally inclusive and transparent forum provided by the United Nations. I urge countries to remain committed to the development of a UN tax convention and encourage the OECD to play a supportive role in this regard.
I was delighted to see the African Ministers’ Declaration calling for negotiations on a UN tax convention – and the pledge of support from the UN Secretary-General. This is an obvious and necessary next step to address the global threat of illicit financial flows, including corporate tax abuse.
I fully support the creation of a globally inclusive, intergovernmental process at the UN. I urge all international organisations and member-states to resist attempts to block this important step forward, and thus call into question our global commitment to fighting illicit financial flows and corporate tax abuse in support of the Sustainable Development Goals.