Africa Pushes for Stronger Global Tax Rules as UN Negotiations Expose Deep North-South Divide

The push has emerged prominently during the fifth session of the Intergovernmental Negotiating Committee (INC), which is meeting in New York to negotiate the first comprehensive United Nations framework on international tax cooperation.

At the heart of the negotiations is a fundamental question: Should the new convention merely coordinate and improve the existing international tax system, or should it fundamentally rebalance a system that African countries and their civil society allies argue has historically favoured wealthier, capital-exporting jurisdictions?

For African negotiators and the African Civil Society Working Group on the UN Tax Convention, the answer is increasingly clear.

The convention must deliver substantive changes that enable countries where economic activity, markets, consumers, users and value creation occur to secure a fairer share of taxing rights.

The debate has produced broad agreement that international tax cooperation needs strengthening.

But beneath that consensus lies a sharp disagreement over how ambitious the new framework should be, how legally binding its provisions should become and how closely it should interact with existing tax rules developed outside the UN system.

The differences have been particularly visible in discussions on the convention’s objectives and principles, sustainable development, allocation of taxing rights, taxation of high-net-worth individuals, illicit financial flows, harmful tax practices, tax disputes, mutual administrative assistance and exchange of information.

A battle over the mandate

The negotiations opened Aug. 3 with discussions on Articles 1 and 2, dealing with the objectives and principles of the proposed convention. Speaking for the African Group, Zambia argued that the draft provisions should remain faithful to the Terms of Reference adopted by the UN General Assembly under Resolution 79/235.

For African countries, this is more than a drafting preference. The Terms of Reference constitute the negotiating mandate itself. Kenya, Côte d’Ivoire, Senegal, Nigeria, Ghana, Algeria, Tanzania and Burkina Faso backed the position, arguing that reopening the objectives at this advanced stage could effectively amount to renegotiating the mandate.

Nigeria went further, describing Articles 1 and 2 as the guide or constitutional foundation of the convention.The African Group also rejected proposals to introduce references to complementarity and existing international agreements into the objectives. It argued that the relationship between the new convention, existing agreements, international instruments and domestic law is already addressed under Article 21.

African countries also resisted attempts to move the objectives and principles into the preamble. Zambia, Kenya and Côte d’Ivoire argued that while a preamble provides context, Article 1 establishes the legal objectives that guide the convention.

The European Union and several other countries took a different approach. Ireland, speaking for EU member states, proposed strengthening Articles 1 and 2 by explicitly recognising the existing international tax architecture, ensuring complementarity with existing agreements and improving legal certainty. The EU position also sought reassurance that existing treaty obligations would remain unaffected unless countries agreed otherwise. Japan, Germany, France, Italy, Belgium, Austria and other countries broadly supported elements of this approach.

The disagreement illustrates one of the central tensions running through the negotiations: Africa is pushing for the UN process to produce a new and more inclusive tax architecture, while several developed countries are seeking assurances that the convention will not disrupt existing arrangements.

Tax cooperation and sustainable development

The same divide surfaced in discussions on Article 4, which addresses sustainable development. African countries argued that the provision already strikes an appropriate balance between economic, social and environmental dimensions of sustainable development. Zambia and Nigeria supported retaining the article substantially as drafted, noting that it already recognises different national capacities and the importance of domestic resource mobilisation. For the African Group, expanding the provision into a detailed catalogue of environmental, human rights, gender and fiscal policy commitments could undermine its purpose as a high-level framework provision.

Other countries wanted considerably more. Jamaica proposed references to the principle of sustainable development, Common but Differentiated Responsibilities and Respective Capabilities, international environmental treaties and the International Court of Justice’s advisory opinion on climate change.

Brazil proposed linking international tax cooperation more explicitly to domestic resource mobilisation, human rights, gender equality, racial equality, environmental sustainability and progressive taxation. Mexico and Azerbaijan supported several of these ideas, while the United Kingdom called for commitments arising from the Financing for Development process. India occupied a middle position, supporting a stronger reference to domestic resource mobilisation, inequality and inclusive growth but cautioning against overly prescriptive language that could restrict countries’ policy space.

The debate therefore goes beyond taxation. It asks whether the international tax system should be explicitly designed as an instrument for achieving sustainable development or whether those objectives should remain outside the convention’s core legal provisions.

Africa’s central demand: fair taxing rights

The most consequential battle may be over Article 5 on fair allocation of taxing rights.For the African Group, this provision is the heart of the convention.Zambia, speaking for Africa, argued that Article 5 must establish clear principles governing the allocation of taxing rights and provide the foundation for future protocols. African countries are concerned that successive revisions of the draft have weakened the provision.Algeria argued that stronger language recognising taxing rights where value is created or economic activity occurs had been replaced with weaker references to “economic contribution”.

That change matters.African countries want economic activity to remain a central basis for determining where taxing rights arise. Kenya, Senegal and Algeria supported restoring the concept, with Senegal arguing that “economic activity” provides a clearer legal concept than the more ambiguous notion of “real economic contribution.”Another major dispute concerns the wording of nexus criteria.

African countries want nexus factors to operate alternatively — effectively using “or” rather than “and” — so that a country would not have to demonstrate multiple conditions simultaneously before establishing taxing rights. They argue that cumulative requirements would make it unnecessarily difficult for source and market jurisdictions to exercise taxing rights.

The African Group is also demanding stronger implementation language. It objects to the phrase “States Parties shall explore and pursue”, arguing that countries should instead be required to adopt concrete measures, including domestic legislative reforms, protocols and, where necessary, renegotiation of tax treaties. For Africa, treaty reform is particularly important because existing bilateral tax arrangements can constrain the ability of developing countries to tax income generated within their jurisdictions.

Many developed countries are wary of this approach. Germany argued that the convention should not establish new taxing allocation rules. The United Kingdom expressed concern that the draft could confer taxing rights on market jurisdictions too broadly. Belgium and Luxembourg raised concerns about multiple nexus factors and legal uncertainty, while Italy and Austria argued that detailed allocation rules should be developed through protocols rather than the framework convention.

Yet some countries, including India, Brazil, China and Jamaica, broadly aligned with aspects of the African position on strengthening source-based taxing rights. The result is a major unresolved question: will the convention merely articulate a broad principle of fair allocation, or will it establish a new basis for actually redistributing taxing rights?

The wealthy and the tax system

Article 6, dealing with high-net-worth individuals, provides another illustration of Africa’s push for stronger commitments. African countries argue that wealthy individuals must not be allowed to exploit gaps between national tax systems to avoid appropriate taxation. The African Group wants the draft’s stronger implementation language restored. Instead of requiring States Parties merely to “cooperate to enhance” effective taxation, Africa wants countries to “develop and implement” measures. It also wants the word “general” removed from the commitment to exchange information about high-net-worth individuals. 

For African countries, meaningful information exchange is indispensable to tackling sophisticated tax avoidance, evasion and illicit financial flows. They also want States Parties to “adopt” coordinated approaches rather than merely “explore” them. The African Group has opposed repeated references to national sovereignty in Article 6, arguing that sovereignty is already recognised as a principle under Article 2.

Other countries have been more cautious. Switzerland, Germany, Norway, Austria, Sweden, Japan and Singapore generally favoured a high-level provision that builds upon existing information-exchange mechanisms rather than creating new obligations.

Some countries argued that detailed operational rules should be placed in future protocols. The debate over high-net-worth individuals therefore reflects another broader disagreement: whether the convention should create direct obligations or provide a framework within which countries can progressively develop cooperation.

The fight against illicit financial flows

If fair taxing rights are the heart of the convention, Article 7 on tax-related illicit financial flows could become one of its most politically sensitive provisions. The African Group sees tax-related illicit financial flows as a major barrier to development and domestic resource mobilisation. Zambia proposed replacing the relatively weak commitment that States Parties “shall cooperate” with an obligation to “develop and implement measures” to combat tax-related illicit financial flows.

African countries also want tax avoidance and tax evasion to remain within the scope of the article. Nigeria argued that tax avoidance, while often technically lawful, can nevertheless undermine tax justice and domestic resource mobilisation, particularly where aggressive arrangements exploit weaknesses in tax systems. The African Group also wants a broad understanding of tax-related illicit financial flows and opposes excluding non-tax crimes that generate taxable income.

For African countries, the issue is not theoretical. Illicit financial flows drain resources that governments could otherwise use for health, education, infrastructure and other public services.

But several developed countries strongly resisted the broader definition. Germany, the United Kingdom, Belgium, Austria, Japan, Singapore, Italy and others argued that tax avoidance and tax evasion are legally distinct concepts and that lawful tax avoidance should not automatically be characterised as illicit.

Several countries called for clearer definitions and further negotiations before Article 7 is finalised. This disagreement exposes a fundamental conceptual divide: Africa is approaching illicit financial flows from the perspective of their development consequences, while several other countries are approaching the issue primarily through the lens of legal definitions and domestic law.

Who sets the rules on harmful tax practices?

The same contest over global rule-making is visible in Article 8 on harmful tax practices. African countries want the UN convention to develop universal standards rather than simply adopt rules created in other international forums.

The African Group wants the Conference of the Parties to play a central role in establishing criteria for identifying harmful tax practices, monitoring implementation and developing future measures. Zambia argued that countries should commit to developing, enhancing and implementing measures to eliminate harmful tax practices rather than merely exploring appropriate measures. Mauritius, Kenya and Tanzania supported the stronger approach.

African countries also opposed references to regional standards, arguing that harmful tax practices are inherently global and should be addressed through universally agreed rules. South Africa and Ghana questioned the effectiveness of existing international mechanisms, particularly because developing countries have not always participated equally in their formulation.

Several developed countries, however, warned against creating parallel systems. The United Kingdom, Germany, France, Japan, Belgium, Sweden and others argued that the convention should build upon existing international standards and avoid duplication. Some countries also called for clear and objective criteria defining what constitutes a harmful tax practice.

The result is another battle over institutional legitimacy: should the UN become the primary venue for establishing global tax standards, or should the convention integrate existing standards developed elsewhere?

Tax disputes and the promise of Protocol 2

Article 9 focuses on preventing and resolving tax disputes. The African Group wants the provision to be more than an aspirational statement. It proposed removing references to countries’ “needs, capacities and priorities”, which it believes could weaken obligations. African countries also proposed restructuring the article around three elements: effective and timely dispute prevention and resolution; clear legislation and accessible mechanisms; and future guidance or legal instruments, including Protocol 2.

Nigeria and Kenya called for dispute resolution mechanisms that are fair, transparent, independent, accessible and effective. African countries also want the article to make clear that it addresses cross-border tax disputes. Other delegations generally agreed with the objective but were more cautious about placing operational requirements in the framework convention.

Countries including Germany, the United Kingdom, Norway, Austria and the United Arab Emirates supported greater flexibility and argued that detailed mechanisms belong in Protocol 2. The challenge will be to ensure that Protocol 2 does not become a mechanism for postponing difficult commitments indefinitely.

Cooperation that actually works

Article 10 on mutual administrative assistance reveals a similar disagreement. Africa regards mutual administrative assistance as a central pillar of the new tax architecture. The African Group wants countries to move from promising to “cooperate to promote” mutual assistance towards actual commitments to promote and implement it.

It also wants States to eliminate barriers to cooperation, rather than merely identify them. Cameroon proposed stronger domestic implementation requirements, while Nigeria stressed the need for a universal legal framework capable of bringing all countries into effective cooperation. Many other countries agree that mutual administrative assistance is essential but worry about duplication.

The United Kingdom, Germany, France, Japan, Singapore and others argued that the convention should complement existing instruments such as the Multilateral Convention on Mutual Administrative Assistance in Tax Matters. Several countries also want the ability to make reservations where constitutional or domestic legal constraints prevent full implementation.

The disagreement is therefore less about whether cooperation is necessary and more about whether the UN convention should create a universal baseline or allow countries to rely on existing arrangements.

Exchange of information: Africa refuses to let it disappear

The future of Article 11 on exchange of information has become another important test. The African Group strongly opposes proposals to delete the article. For African countries, exchange of information is indispensable to implementing provisions on high-net-worth individuals and illicit financial flows. Zambia argued that because information exchange is already embedded in several substantive provisions, a standalone article would improve the coherence of the convention.Nigeria similarly rejected deletion, arguing that exchange of information is essential to modern tax administration.

Africa has, however, accepted that the current article may be too technically detailed. Its preference is to retain the core legal commitment while moving issues such as technical criteria and capacity constraints into future protocols or guidance from the Conference of the Parties.

Several countries want the opposite. Austria, Poland, Germany, France, Italy, Norway, Ireland and Israel have questioned whether a detailed exchange-of-information provision belongs in a framework convention. 

Others, including India, Brazil, the United Kingdom, Japan, Singapore and Switzerland, favour retaining a simplified, high-level commitment.

Many also want the convention to align with existing international standards and preserve safeguards relating to confidentiality, data protection and the “foreseeable relevance” standard.

A defining moment for global tax governance

The negotiations underway in New York are ultimately about much more than drafting individual articles. They are about who gets to shape the rules governing the global economy.

For African countries, the UN process represents an opportunity to correct structural imbalances in international taxation and create a system capable of helping governments mobilise the domestic resources needed to finance development. Their negotiating strategy is therefore consistently focused on stronger obligations, greater source-based taxing rights, broader cooperation, universal participation and a central role for the UN and its Conference of the Parties in setting future standards.

For many developed countries, the priority is different. They want legal certainty, coherence with existing international tax instruments, protection of domestic policy space and avoidance of overlapping or conflicting obligations. Neither side rejects international tax cooperation. The disagreement is over what meaningful cooperation should look like.

The African Civil Society Working Group on the UN Tax Convention, coordinated by Tax Justice Network Africa, has argued that the negotiations are particularly important for Africa because a fairer international tax system could expand the resources available for public services and the social and economic rights of African citizens.

As the INC continues its work, the most important battles may therefore not be over whether countries support tax cooperation, but over the strength of the obligations they are prepared to accept.

Will “cooperate” become “implement”?

Will “explore” become “adopt”?

Will economic activity become a recognised basis for taxing rights?

Will the UN establish new universal standards, or primarily incorporate rules developed elsewhere?

And will the final convention materially alter the balance of taxing rights between source and residence jurisdictions?

The answers will determine whether the UN Framework Convention becomes another coordination instrument in the existing international tax architecture — or a historic attempt to rebuild that architecture around a more inclusive and development-oriented global tax system.

For Africa, the stakes are particularly high. A convention that strengthens taxing rights, tackles illicit financial flows, improves information exchange and limits harmful tax competition could help countries mobilise billions of dollars for development.

But if ambitious commitments are diluted into voluntary cooperation, deferred to future protocols or constrained by existing arrangements, African negotiators and civil society groups fear that the opportunity for structural reform could be lost.

The fifth session of the INC is therefore emerging as a critical test of whether the world’s governments can move beyond broad agreement on the need for tax cooperation and reach consensus on the harder question: what would a genuinely fair global tax system actually require?