The UN has issued a release announcing that the Second Committee (Economic and Financial) has concluded its seventy-ninth session on 27 November 2024.

The Second Committee has approved four draft resolutions and two draft decisions on a range of topics, with a vote on a text taking up international tax cooperation, among other things.

Nigeria’s delegate, speaking for the African Group, introduced the text titled “Promotion of inclusive and effective international tax cooperation at the United Nations” (document A/C.2/79/L.8/Rev.1), which contained a statement of programme budget implications (document A/C.2/79/L.58). The Committee approved it in a recorded vote of 125 in favour to 9 against (Argentina, Australia, Canada, Israel, Japan, New Zealand, Republic of Korea, United Kingdom, United States), with 46 abstentions.

By the draft, the Assembly would decide to adopt the terms of reference for a United Nations Framework Convention on International Tax Cooperation as contained in annex I to the report on the second session of the Ad Hoc Committee. Further to the text, it would stress that Member States should be fully engaged in the negotiation of the framework convention and endeavour to ensure continuity in their representation.

Before action, Hungary’s delegate, speaking for the European Union in its capacity as observer, asked for clarification, noting the bloc requested votes on operative paragraphs 2 and 5, as the latter makes no reference to the principle that broad consensus-based decision-making is crucial to a successful process.

In response, Nigeria’s delegate, speaking for the Arab Group, said the adoption of the terms of reference is essential, as they reflected consensus reached during the Ad Hoc Committee’s work, balancing the perspectives of all Member States. “Reopening this issue now risks undermining that consensus and delaying the process unnecessarily,” he stated, calling on Member States to support the paragraphs.

Addressing operative paragraph 2 of “L.8/Rev.1”, the Committee decided to retain it in a recorded vote of 119 in favour to 48 against, with 5 abstentions (Türkiye, United Arab Emirates, Iceland, Mexico, Norway).

Next, it turned to operative paragraph 5 of the draft, deciding to retain it in a recorded vote of 121 in favour to 47 against, with 5 abstentions (Mexico, Iceland, United Arab Emirates, United Kingdom, Türkiye).

The representative of the United States said his delegation called for a vote, firstly because the text adopts the terms of reference that 48 Member States did not support. “We’re also concerned that the work would duplicate existing intergovernmental negotiations in other fora,” he added. As the text further does not decide the modalities of how decisions are made, he called on Member States to vote against it.

However, Nigeria’s delegate, speaking for the African Group, said that the resolution represents “the culmination of months of negotiations and reflects a balanced approach to advancing fairness, equity and inclusivity” in global tax cooperation. Voting against it risks undermining the principles of multilateralism and disregarding the unique challenges faced by developing countries, he stressed, calling on delegations to vote in favour of the text.

While voting in favour, Singapore’s delegate still voiced concern, noting that a decision-making modality that garners collective agreement will produce solutions that are more effective in addressing the challenges that developing countries are facing.

The United Kingdom’s delegate, while championing efforts to combat base erosion and profit shifting, increased tax transparency, and customs capacity building partnerships with developing countries, emphasised the need to ensure that a framework convention will not undermine existing tax rules. She recalled that in July, her delegation made six proposals for changes to the zero draft of the terms of reference, none of which were reflected in the final text.

The representative of the Bahamas, whose second-largest industry is financial services, supported the resolution which “marks a historic and transformative step towards bridging critical gaps in the international tax architecture”. He called for the framework convention to reflect the needs and views of the Global South.

Other delegates attached great importance to international tax cooperation and inclusivity, while Norway’s delegate underscored that the negotiation process ahead must be transparent, and abstained. New Zealand’s delegate, speaking also for Australia and Canada, stressed that strong and inclusive dialogue is needed in the draft, expressing regret that the resolution makes no mention of consensus. Meanwhile, Lichtenstein’s representative did not support the draft as the framework convention on taxation lacked consensus based on common decisions.

The representative of Japan said that deliberations in the Intergovernmental Negotiation Committee should aim to foster broad consensus reflecting the various positions of all Member States and relevant stakeholders. It is concerning that the resolution does not explicitly allow non-State jurisdictions to participate in that Committee, he added.