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African countries have successfully secured space at the United Nations where they can discuss global tax rules on equal footing. This platform will help address issues like tax evasion, financial irregularities, and unfair tax competition, which hinder revenue generation for development.
By adopting the new tax regulations, governments can recover billions lost to tax evasion, corruption, and money laundering, and take decisive action against severe poverty, COVID-19, and climate change.
In her remarks, Chenai Mukumba, Executive Director of the Tax Justice Network Africa (TJNA), noted that the current tax system is biased towards developed countries, limiting revenue for developing nations.
“What this means is that for many years, Africans have been saying that the current tax system is unfair in the sense that it is biased towards rich countries or developed countries and because of that it doesn’t allow developing countries to generate as much revenue as they should from their own resources,” said Mukumba.
The UN Tax Convention aims to fill the gap in global financial architecture by improving international tax cooperation.
Further, this convention will address the imbalance where international corporations evade taxes in poorer countries while benefiting from protections in wealthier ones. It is expected to generate significant revenue for climate protection and sustainable development.
Global reforms, such as a wealth tax on high-net-worth individuals and corporate tax system changes, could yield up to $700 billion annually, with progressive environmental taxes further boosting revenue and promoting sustainability.
The UN Tax Convention is poised to bridge financing gaps for sustainable development and enhance public services through increased tax revenues.
Nigeria, representing the Africa Group, hailed the convention as a landmark achievement for creating a fair and inclusive global tax system. The convention will serve as a true global body for international tax cooperation, distinct from existing regional groups.
PHOTO | SHUTTERSTOCK