The North against the South of the planet. On the one hand, the bulk of the world’s population (75%): China, India and Brazil and the block of developing countries, the BRICS. On the other, the great economic powers: the United States, Europe (including Spain), Japan and Australia. The G7.
Last Wednesday there was an unprecedented fracture in economic issues. Under the initiative of the African states, the United Nations General Assembly approved, with 125 votes in favor and 48 against, that the UN take the reins in matters of international taxation. It has given the green light to launch a framework convention, which will establish the field of action to discipline and set the minimum criteria for international taxation. A text that should be voted on in about a year. Prestigious economists who have been calling for more equitable global taxation for years, such as Thomas Piketty, Joseph Stiglitz and Gabriel Zucman, celebrated the news as a great advance.
This is a complete challenge to the OECD (Organization for Economic Cooperation and Development), the multilateral organization of Western economies, which until now – in the last two years – had tried, with mixed success, to develop global guidelines. to design a minimum corporate tax and a rate for multinationals. This organization issued a brief (not to say icy) statement, in which it defended the work carried out so far, with a general willingness to collaborate.
The Southern rebellion, so to speak, is motivated by several factors. One, these developing countries perceived that the debate process within the OECD was not transparent. They were wary of adopting measures that most of them had not even contributed to developing.
Two, the resistance of the United States to applying part of these regulations (especially those that affect its powerful technological multinationals and not only) was making the OECD initiative lose credibility.
And three, perhaps most importantly, the fiscal plan of the Western economic powers did not offer any guarantee on the elimination of tax havens or jurisdictions with very low taxation (Ireland, Luxembourg, the Netherlands, the British Isles, Switzerland, only to mention a few), which meant, in practice, keeping alive the legal instruments that allow tax avoidance (if not evasion).
The battle is only in its beginnings. “The vote shows that there is a geopolitical risk in fiscal matters,” explains Susana Ruiz, head of fiscal policies at Oxfam. “The refusal of the large Western economies is the demonstration that none of them wants to lose control over their tax regimes,” she adds.
The Tax Justice Network economists’ platform recalled yesterday that, according to its estimates, the countries that voted “no” to the United Nations framework convention are responsible for three quarters of the losses in global tax revenue, most of them hidden in tax havens.
