Sarah Edwards, JustMoney Movement’s Executive Director, explores upcoming possibilities for global cooperation for tax justice…
It’s the season for international meetings! COP29, the G20, and the UN talks on the forthcoming Tax Convention, are all happening over the next couple of weeks.
What does this alphabet soup of global gatherings actually achieve? It is easy to be cynical, especially in the wake of a US election result that has underlined populist and isolationist trends, and seems to move us further away from global cooperation for a more just future.
But the crisis-ridden and unpredictable times we’re living through actually make working together more important, not less. Tax is a good example of this – whether on taxing super-rich individuals or ensuring multinational corporations pay their fair share of taxes, nations need to work together to build international agreement and action.
Looking at the state of the world around us, it’s obvious why we need such action on tax. Many campaigners at the current COP29 UN climate negotiations are calling for taxes on the wealthy to help pay for adapting to changes in the climate and for the loss and damage already caused, especially to poorer countries and communities. Meanwhile global poverty rates have ticked up since Covid for the first time in a generation, governments are struggling to pay for public services and safety nets for the vulnerable, while the gap between rich and poor continues to grow.1
To date, global proposals on tax have failed to make much headway. The prominent institution tasked with international tax cooperation has been (with apologies for yet another acronym!) the OECD (Organization for Economic Co-operation and Development) which is a group of 38 mostly-wealthy nations, sometimes referred to as “the rich country club”. It has been pursuing proposals on how multinational corporations are taxed and on setting a global minimum corporate tax rate, for years now, but without getting very far.
With progress desperately needed but longstanding discussions slow or even stalled, it’s encouraging to see new opportunities emerging. Two such opportunities are at the G20 and the UN.
G20 Leaders’ Summit and wealth taxation
The G20 is a group of the world’s 20 largest economies that work to address major issues around the global economy. It formed in the wake of several international financial crises in the late 1990s and has grown in power and stature since. Critics point to its limited membership, lack of enforcement powers, and undermining of existing international institutions, but it’s difficult to ignore this grouping of major nations, which has declared itself “the primary venue for international economic and financial cooperation”.
G20 heads of state, including Keir Starmer, will meet in Brazil on 18-19 November and on the agenda is a proposal for a common standard on wealth taxation, which could raise $200-$250 billion globally each year. Whilst we’re not hopeful of major breakthroughs on taxing wealth in this forum, it’s a significant space to take this conversation forward. G20 countries are home to the vast majority of the world’s super-rich and have huge historic responsibility for pollution, damage to nature, and the climate crisis.
UN Convention on Tax
The United Nations was formed after the Second World War, to promote peace and security, providing a forum for discussion and cooperation on a wide range of issues. The UN is often seen as ineffective, but on the other hand has drawn praise for its peacekeeping efforts and (though not without dissent) its work to promote human rights.
The introduction of a UN Convention on Tax is all the more remarkable and welcome as progress on economic cooperation has generally been less effective within this institution. Member nations of the UN will decide whether to accept the terms of reference for such a convention during November, with a vote possible as early as 20th. If passed, the substance of the convention would start to be negotiated in early 2025. It could include standards around taxing corporations and the super-rich more fairly. The UK has sadly been one of a handful of countries blocking progress to date, as has the US. The overwhelming majority of countries support the convention, however, in a key example of collective action in the face of a few outliers.
As we grapple with the new political and economic realities around us, opportunities to work together with others around the world towards a fairer, greener future are surely too important to be missed. Fairer taxes paid by corporations and the super-rich globally would have a transformative impact on the lives of billions of people – to their material wellbeing and to the future of a liveable planet. Tax is a justice issue whose time has come and we need the UK Government to realise this and take these opportunities.
Please write to your MP asking the Prime Minister to support bold international action on taxing wealth: