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India Supports The UN Initiative Aimed At Transferring Global Tax Authority Away From The OECD

Muammar

IBX-Jakarta. India, alongside 125 nations, has supported a resolution advocating for a ‘UN tax convention’ aimed at reshaping the global tax landscape. This move is seen by tax experts in India and global think tanks as a monumental shift that would transfer decision-making authority from the OECD, where 38 members, primarily affluent nations, dominate, to a more balanced and fair platform.
The resolution, endorsed by a margin of 125 to 48 votes during the UN General Assembly in New York, faced opposition from major OECD countries such as the US, UK, Netherlands, Switzerland, Japan, France, and Germany. Alongside the African nations proposing the resolution, India, together with fellow BRIC countries – Brazil, Russia, and China – voted in favor of it.
This resolution calls for the establishment of an ad-hoc inter-governmental committee comprising a maximum of 20 member states, ensuring gender and regional representation. Unlike the OECD’s Inclusive Forum, which acts as a collaborative initiative between OECD and non-OECD members but lacks inter-governmental status, this committee will wield more substantial decision-making power.
Within the first year, the initial steps involve reaching an agreement on the terms of reference, followed by the development of a UN Framework Convention on international tax cooperation.
The passage of this resolution has been positively received by the Tax Justice Network, a think-tank, which warned of potential global losses of nearly $5 trillion to tax havens over the next decade unless the UN tax convention is adopted.
Former vice president at the income-tax appellate tribunal, Pramod Kumar, noted that this new arrangement aims to ensure fair tax distribution to source jurisdictions, like India, and the developing world, fostering a global consensus on just and impartial international tax regulations. He highlighted the current bias in international tax rules toward capital-exporting countries and the diminished relevance of OECD perspectives within this new framework.
The terms of reference for this resolution are anticipated to encompass an array of issues, including aggressive tax avoidance and evasion, illicit financial flows, the recovery of stolen assets, and the taxation of the digital economy, with consideration for the views of source countries. While the OECD-led forums have worked on the ‘Two-Pillar solution,’ covering the taxation of the digital economy and proposing a global minimum tax rate, the focus will shift under the UN tax convention paradigm.
Source: https://www.msn.com/en-in/money/topstories/india-backs-un-plan-to-shift-global-tax-reins-from-oecd/ar-AA1kr8xM
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