United Nations leader supports overhaul of global tax laws

The UN Secretary-General Antonio Guterres has thrown his support behind countries and lobby groups that have been calling for global tax laws to be overhauled to prevent wealthy people from sheltering their wealth in tax jurisdictions and avoiding taxes in their home countries.

Previously global tax laws were set by 38 countries of the Organisation for Economic Co-operation and Development (OECD). They were believed to set the laws in favour of the rich classes of the world.

But in his latest report, Guterres called for global tax rules to be decided at the UN instead of the OECD.

Recently, lobby group Tax Justice Network projected that countries will lose nearly US$5 trillion to tax havens over the next decade unless a UN tax convention is adopted to get all countries involved in taxing the rich.

The Secretary-General basically agreed by concluding that only UN leadership on tax can effectively bring an end to global tax abuse – something the OECD has failed to deliver after 10 years of effort.

The Secretary-General writes, “enhancing the UN role in tax-norm shaping and rule setting, fully taking into account existing multilateral and international arrangements, appears the most viable path for making international tax cooperation fully inclusive and more effective.”

Countries are expected to vote this year-end at the UN General Assembly on whether to formally begin the negotiation process on establishing a UN tax convention under the proposal laid out by the Secretary-General.

The tax convention will see more countries participating in setting global tax rules, in an attempt to get much-needed taxes from wealthy people.

If such a convention were to be adopted, it would have implications for the BVI which is one of the most attractive financial services jurisdictions in the world that facilitates daily transactions worth millions.