Working Paper

Inclusive and Effective International Tax Cooperation: Views From the Global South

Working Paper 172

In 2023, demands for the United Nations to take up a larger role in global tax governance are louder than ever before. Nevertheless, there is not yet a global consensus on the way forward. In this paper we investigate how the United Nations (UN) could create a more inclusive and effective space for international cooperation. We define the current governance architecture as an ‘international regime complex’, emphasising the fact that several institutions govern international tax cooperation, without there being a hierarchy between them. Based on evidence drawn from interviews with 33 government officials (mainly from lower-income countries) conducted from May to July 2023, and from literature reviews on global governance arrangements in other policy areas, we discuss what role the UN could take in this international regime complex.

Based on evidence drawn from interviews with 33 government officials (mainly from lower-income countries) conducted from May to July 2023, and from literature reviews on global governance arrangements in other policy areas, we discuss what role the UN could take in this international regime complex.

First, we take stock of interviewees’ views on the current state of global tax cooperation, both in procedural and substantive terms. As expected, many do not consider current decisionmaking processes as fully inclusive, and do not always find international standards appropriate for their countries. Nevertheless the picture is nuanced, and there is disagreement on the desired future evolution of tax cooperation. The fact that many other policy areas face similar problems also suggests that there is no simple solution.

Further, we identify four specific issues of global tax governance that present challenges to many lower-income countries – negotiating capacity, language of negotiations, agenda-setting, and cooperation between political and technical stakeholders. We map out how these issues exist and are dealt with in other regimes, and draw implications for the UN’s future role. To enhance the inclusiveness and effectiveness of international tax cooperation, the UN should invest in building negotiating capacity in lower-income countries, and build a regime that supports more variation in priorities and implementation capacity. It should also consider the differences across countries regarding the capacity to negotiate in English and work with English documents. To support agenda-setting by groups other than the OECD and G-20, the UN can collaborate with regional tax organisations, and draw from regional agreements in the elaboration of policies. Finally, a particular challenge the UN needs to address is the provision of an inclusive space in which countries can come to political agreements that are informed by experts.

Authors

Lucinda Cadzow

Lucinda Cadzow is a Fellow in International Political Economy (IPE) in the International Relations Department at LSE. Prior to joining LSE, Lucinda obtained a DPhil in International Relations at the University of Oxford, an MPhil in International Relations from the University of Oxford, and a Bachelor of Arts (Honours) at Monash University in Melbourne.

Martin Hearson

Martin Hearson is a Research Fellow at IDS, co-Research Director of the ICTD and the International Tax programme lead. His research focuses on the politics of international business taxation, and in particular the relationship between developed and developing countries. Before joining ICTD, Martin was a fellow in international political economy at the London School of Economics and Political Science, teaching courses on political economy and global financial governance.

Frederik Heitmüller

Frederik Heitmüller works with ICTD’s International Tax Team. His research focuses on policies against corporate tax avoidance, the influence of international norms in the Global South and global tax governance. He is also a PhD Candidate and Teacher in international tax law at Leiden University’s Institute for Tax Law and Economics. Prior to joining ICTD, he worked at Leiden University’s GLOBTAXGOV project, investigating the political economy of the BEPS Project in the Global South. He has a master’s degree in political science from Sciences Po Bordeaux and University of Stuttgart.

Katharina Kuhn

Katharina Kuhn is a PhD Candidate at the London School of Economics’ Department of International Relations. She holds a BA in Political Science, Sociology and Religious Studies from the University of Würzburg, and an MSc in Global Governance and Diplomacy from the University of Oxford. Katharina researches the factors that shape the international tax policy of developing states, with a particular focus on their participation in the OECD/G-20 BEPS Project.

Okanga Okanga

Okanga Okanga is a Nigerian and Canadian lawyer, academic and tax policy consultant. He holds masters and doctorate in law degrees from Dalhousie University. He researches and teaches mainly tax law and policy, with occasional research into international trade law and development studies.

Tovony Randriamanalina

Tovony Randriamanalina has a PhD in International Tax Law from the University of Paris-Dauphine. Prior to her academic work, she was a Tax Official at the Malagasy Revenue Authority and is a graduate of the National School of Administration of Madagascar. She researches the appropriateness of the transfer pricing rules for the particular case of developing countries. Her presentation on this topic won the prize for the best student paper of the ATAF/ATRN inaugural conference of the African Tax Research Network on 2015.
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Publication Details

Publisher: ICTD
Date: August 2023
Citation: Cadzow, L.; Hearson, M.; Heitmüller, F.; Kuhn, K., Okanga, O. and Randriamanalina, T. (2023) Inclusive and Effective International Tax Cooperation: Views From the Global South, ICTD Working Paper 172, Brighton: Institute of Development Studies, DOI 10.19088/ICTD.2023.046
Research theme:
Keywords: decision-making, international tax, lower-income countries, negotiation, OECD, regime complex, tax governance, UN