Rise of Global South: Africa-backed new tax regime carried successfully in vote with India's support

India was among the 125 countries to vote in the United Nations General Assembly for the organisation to develop a global tax framework. The historic resolution was tabled by the Africa Group and a host of Western countries or OECD nations, including UK, US, and the entire European Union bloc, voted against it. The resolution was tabled by the African Group under the title: “Promotion of inclusive and effective international tax cooperation at the United Nations”. “It marked a historic moment for Africa and the world,” the African Union said in a release. The resolution was passed with 125 vote in favor of the Tax Convention, with 48 votes against, and 9 Abstentions. The OECD — a group of 38 mostly high-income countries that includes the US and the UK — for decades has dominated international tax policy. However, recent years have seen growing criticism over the outsized power wielded by wealthy countries in its closed-door decision-making, including at the top levels of the UN. The budget for the new intergovernmental tax process will be up for approval at the UN in December 2023. The negotiations between governments are expected to begin in 2024. Meanwhile, the countries that have voted against the resolution will still be invited to join the intergovernmental UN process to develop a new global Tax Convention which begins in 2024. The focus, until August 2024, will be on developing Terms of Reference for a new UN Framework Convention on International Tax Cooperation. Based on these Terms of Reference, governments then will proceed to negotiate the new UN Tax Convention. As per the African Union, the resolution represents a beacon of hope for developing nations. “It will facilitate the access of much needed financial resources, crucial for responding to the current debt crises and facilitate the pursuit of achieving sustainable development. It is also in line with African aspirations as outlined in the AU Agenda 2063, reinforcing the commitment by Member States, to strengthening tax systems and fostering tax equity,” the African Union said. The resolution is also seen as a step in line with Africa’s call for the necessity for restructuring the global financial system to ensure increased funding for attaining the sustainable development goals. With inputs from agencies