Rebalancing Power: A UN Tax Council as A Political Counterbalance in the Global Tax Debate

The 22 December 2023 UN General Assembly’s vote to establish terms of reference (ToR) for a framework convention on international tax cooperation has been hailed as a landmark success. This article cautions it could also undermine the last decade’s progress towards more inclusive tax cooperation. Discussions on global tax governance have persistently highlighted the power asymmetries between advanced and less advanced economies. Despite extensive analyses, few concrete solutions have been proposed addressing these imbalances. This article presents a model that illustrates that the divide between advanced and less advanced economies in the current UN process manifests itself along two main axes: the decision-making processes in a new UN body and the positioning of it relative to other tax cooperation entities. It is demonstrated that none of the model’s options meet the requirements for inclusive and effective cooperation as none reconcile the fundamental power asymmetry. Consequently, this article advocates for exploring the establishment of a UN Tax Council. Inspired by the UN Security Council, it would feature balanced regional representation with veto powers for all members. This positions it as a political counterbalance to the predominantly technocratic processes at the OECD, realigning power dynamics with current geopolitical and economic realities.