A coalition of 228 civil society organisations including GCAP and trade unions, represented by the Global Alliance for Tax Justice (GATJ), has submitted comprehensive feedback on the zero draft Terms of Reference (ToR) for the United Nations Framework Convention on International Tax Cooperation (FCITC). This response comes as part of the ongoing efforts following the UNGA Resolution 78/230, which aims to create a fair and effective international tax system.

Download the feedback document on the zero draft ToR for the UN Framework Convention on FCITC here.

Urgency and comprehensive scope emphasized

The coalition underscores the urgency of finalizing the FCITC, highlighting the significant annual losses in tax revenue due to international tax abuse, estimated to be in the hundreds of billions of dollars. These resources are crucial for fulfilling international commitments related to development, human rights, and environmental protection. The coalition supports the timeline proposed in the zero draft (paragraph 16), which reflects the pressing need for public resources.

Support for key components of the zero draft

The coalition expresses strong support for the main components of the zero draft, which include objectives, principles, commitments, protocols, and key institutions. They commend the draft for providing a solid basis for negotiations and for excluding proposals that fall outside or contradict the mandate of the Ad Hoc Committee as set forth in Resolution 78/230.

Essential elements highlighted

The submission emphasizes several high-priority issues that should be maintained in the ToR:

  • Holistic objectives with clear links to sustainable development and fairness in international tax rules.
  • Clear principles, including the respect for the tax sovereignty of states and their obligations to other states.
  • Substantive elements covering key tax-related issues such as fair allocation of taxing rights, effective taxation of high-net-worth individuals, and addressing illicit financial flows.
  • Commitments to ensure tax measures contribute to environmental challenges.

Recommendations for additional elements

The coalition also advocates for the inclusion of additional elements in the ToR, such as:

  • Special and differential treatment for developing countries.
  • Goals to reduce inequalities within and among countries.
  • Promotion of progressive tax systems.
  • Tax and gender equality, addressing the disproportionate tax burden on women.
  • Transparency and civil society participation, including comprehensive public reporting and transparency around tax incentives.
  • Exploration of international tax initiatives as innovative sources of financing for development and environmental protection.

Detailed feedback on specific sections

The coalition provides detailed suggestions for amendments and additions to specific sections of the zero draft, including objectives, principles, substantive elements, and structural elements of the framework convention. It emphasize the need for commitments on issues like fair and effective taxation of extractive industries, progressive tax systems and the impact of tax policies on gender equality.

Call for effective participation and capacity building

The coalition welcomes the provisions for capacity building and the participation of developing countries in the negotiation process. They propose the establishment of a Trust Fund to support the participation of developing countries and stress the importance of civil society contributions in line with Resolution 78/230.

Toward a fair and inclusive global tax system

The joint submission reflects a strong commitment to ensuring that the UN Framework Convention on International Tax Cooperation is fair, inclusive, and capable of addressing the significant challenges posed by international tax abuse. It aims to enhance the zero draft and ensure that the final convention promotes sustainable development, human rights, and environmental protection.