UN High-Level Dialogue urges tax reforms amidst rising illicit financial flows
On September 20, the UN convened a high-level dialogue on financing for development, with a specific focus on promoting inclusive and effective international tax cooperation and domestic resource mobilization. Distinguished speakers, including the President of Nigeria, the Prime Minister of Norway, the Executive Director of the Global Initiative for Economic, Social and Cultural Rights, and the Chair of the High-Level Panel on Illicit Financial Flows (IFFs) from Africa, addressed the gathering.
Thabo Mbeki, Chair of the High-Level Panel on IFFs from Africa, emphasized the urgency of implementing the UN Resolution on tax cooperation and strongly advocated for Option 2 outlined in the Secretary General's report—a legally binding multilateral instrument to govern international taxation. High-level representatives from UN member states stressed the need for international architecture reform, improved governance, and greater participation of developing countries in global institutions. Some nations, such as Hungary and Estonia, highlighted the importance of sharing tax expertise and leveraging digital technology to enhance tax administration efficiency.
Chennai Mukumba of the Tax Justice Network Africa called for a comprehensive platform that takes into account the needs and concerns of all countries, with a particular emphasis on combating tax evasion and IFFs. Mukumba noted the substantial losses suffered by Africa due to IFFs, which had escalated from $50 billion annually to nearly $90 billion, underscoring the critical importance of tax system reform.
John Denton of the International Chambers of Commerce stressed the necessity of international tax cooperation to ensure tax certainty, prevent double taxation, and promote coordination to minimize compliance burdens and tax disputes.
Sima Bahous, Executive Director of UN Women, highlighted the importance of aligning tax systems with human rights principles, particularly gender equality. She called for increased investment to address gender disparities and greater representation of women in leadership roles.
In summary, this high-level dialogue underscored the pressing need for international tax cooperation and reform to support global development and human rights goals. It also spotlighted the alarming increase in illicit financial flows from Africa, making a strong case for comprehensive tax system reform to counter these losses and promote economic development and stability in the region and beyond.