Africa took a leading role in shaping the terms of reference for future negotiations, strongly advocating for a more inclusive and transparent framework. With leadership from Nigeria, Kenya, and Ghana, Africa is now influencing the global tax agenda, challenging the OECD's approach.

On August 16, 2024, a significant milestone was reached in the ongoing efforts to reform international tax cooperation. Negotiations have now moved to the United Nations, marking a new chapter in these discussions. In less than ten months, the terms of reference for this new round of talks were adopted. This document has been eagerly awaited by many countries, especially in Africa, who have been seeking a more inclusive negotiation framework than that offered by the Organization for Economic Cooperation and Development (OECD).

"For the first time, we have commitments to a fair allocation of taxing rights between countries, and to ensuring that countries do not undermine human rights around the world through selfish, short-sighted tax policies. This just shows how much better a transparent and democratic process can be at fixing our global problems, than the opaque dealmaking we all suffer from in the rich countries’ club at the OECD," said Alex Cobham, Executive Director of the Tax Justice Network, an organization that has been advocating for tax rule reforms and transparency in the global financial system for 20 years.

This progress aligns with a longstanding demand from the African Union, which has been pushing for a reform of the international financial system. Their focus is on improving the ability of states to mobilize domestic budgetary resources. Institutionally, the idea of tax cooperation under the UN was first raised by the High-Level Panel on Illicit Financial Flows, led by former South African President Thabo Mbeki. The panel highlighted the damaging effects of aggressive tax avoidance and suggested that solutions should be decided at the UN.

Meanwhile, the OECD, which was tasked by the G20 (a group of the world's 20 richest countries plus the European Union), had been leading the discussions. They proposed solutions to tackle dubious tax practices, allocate tax rights, and establish a minimum tax to combat tax havens. However, these proposals, already difficult to implement, were criticized for lacking inclusivity and not considering the interests of economically weaker countries.

In recent discussions at the UN, held from July 30 to August 16, 2024, Southern countries, led by the African block, dominated the debates and pushed their priorities. Several European Union countries, also members of the OECD, wanted the terms of reference to include existing work to avoid duplication. However, under the leadership of Nigeria, Kenya, Ghana, and Senegal, African countries and other Southern countries succeeded in having this proposal removed.

The adopted terms of reference pave the way for new discussions on crucial issues such as taxing the ultra-rich, combating tax evasion, and ensuring a more equitable and transparent tax cooperation framework. The stakes are high. In its latest report on tax transparency in Africa, the OECD noted that 12 African countries recovered €3.8 billion in tax revenues thanks to its information-sharing mechanisms.

However, the two most recent editions of the Global Tax Justice Report (2021 and 2023), based on 5% of multinational companies' public accounts, suggest that Africa's tax losses exceed $30 billion. This figure does not include the often poorly justified tax exemptions that African countries are forced to grant to attract investment.

The UN's adopted terms of reference also call on negotiators to address the taxation of the ultra-rich. These individuals often move their wealth to jurisdictions where it is lightly or not taxed at all. According to the "Africa Wealth Report," 18,700 millionaires have left the continent, taking their wealth with them, making it nearly impossible to tax these funds.