Finances and Taxes

Without the polluter-pays principle, international climate policy cannot be funded – without tax justice, it is not feasible. A mini-world tour with an unequal but perhaps soon symbiotic duo.

Next week ushers in another round of negotiations on a Framework Tax Convention at the UN headquarters in New York. Recently, the Swiss Cantons of Basel City and Zug, noted for their low corporate tax rates, again provided new material illustrating why this is an absolute necessity.

To align themselves with the Paris Agreement, banks have established and extolled the virtues of voluntary climate alliances. A recent European Central Bank study shows them to be ineffective.

Negotiations are now in progress at the UN on the future drafting of the Framework Convention on International Cooperation in Tax Matters. Our tax policy expert was on hand, and was impressed by the negotiating strength of the African countries.

In November, a large majority of UN member states agreed to a UN Framework Convention on Taxation. In the run-up, our tax policy expert toured the city of New York and the institution.

In 2015, governments committed to aligning financial flows with the climate objectives of the Paris Agreement. Where do things stand with implementation? What is Switzerland doing? A stocktake.

In New York, a vast majority of UN Member States has voted in favour of a UN framework convention on tax. That is a major success for the Global South and, for the world community, an opportunity to create truly globally applicable rules for the first time in the history of international tax policy.

Even at the height of the climate crisis, gas mega-projects are being mounted in Mozambique by oil majors, including TotalEnergies, in which the Swiss National Bank holds a stake. These projects are fuelling conflicts while not benefiting the people.

In 2016, the OECD promised to reform the international tax system such that it would also serve the interests of the Global South. Seven years on, the OECD has clearly fallen short of its own ambitions. It may now be time for the UN to step in.