The South Centre’s Contributions to the Reform of the International Tax System
By Abdul Muheet Chowdhary
The South Centre has, over the last 30 years, contributed to major reforms to the international tax system to make it fairer and more equitable for developing countries. Some of the key impacts relate to the UN Framework Convention on International Tax Cooperation and updates to the UN Model Tax Convention to strengthen developing countries’ taxing rights on automated digital services, shipping and air transport, services more broadly, extractive industries, insurance premiums, computer software, offshore indirect transfers of capital gains, the subject to tax rule and wealth taxes. The South Centre also produced pioneering revenue estimates for its Member States on the UN and OECD solutions for taxing the digital economy.
27 TH SESSION OF THE INTERGOVERNMENTAL WORKING GROUP ON THE RIGHT TO DEVELOPMENT (21 MAY 2026, PDN-TEMPUS)
Panel: Tax-related illicit financial flows and the right to development
South Centre Intervention
The South Centre’s spoke at the United Nations’ 27th Session of the Intergovernmental Working Group on the Right to Development on a panel discussion on tax-related illicit financial flows and the right to development.
Key points:
– The UN Framework Convention on International Tax Cooperation (UNFCITC) must include tax avoidance in the definition of tax-related illicit financial flows (TIFFs)
– UNFCITC must also include an effective monitoring mechanism so progress on reducing TIFFs can be measured
– Public Country by Country Reporting (pCBCR) of tax paid is a key component of the fight against TIFFs and the South Centre is taking various actions to promote pCBCR
– UNFCITC’s second protocol’s tools on dispute prevention like joint audits have huge potential to reduce TIFFs
– UNFCITC’s Conference of Parties will play a central role in ensuring effectiveness and must be well designed.
STATEMENT BY DR. CARLOS CORREA, EXECUTIVE DIRECTOR OF THE SOUTH CENTRE, TO THE MINISTERS AND GOVERNORS MEETING OF THE INTERGOVERNMENTAL GROUP OF TWENTY-FOUR (G-24)
14 April 2026, Washington, D.C.
See the South Centre’s statement to the G-24 below.
A Regional Tax Cooperation Initiative Under the ECOWAS Framework
The South Centre is supporting two of its Member States, Liberia and Sierra Leone, in implementing a pilot Simultaneous Tax Examination on Multinational Enterprises (MNEs), in partnership with the Economic Community of West African States (ECOWAS) Commission. The pilot, which can generate potentially substantial tax revenues, will operationalize the ECOWAS Supplementary Act on Mutual Administrative Assistance in Tax Matters. The pioneering pilot, potentially the first of its kind in the Global South, will develop audit capacity, generate domestic revenue, and build a model that can be scaled across other Member States of the South Centre and ECOWAS.
Read more in the press release jointly issued with ECOWAS and the governments of Liberia and Sierra Leone (également disponible en français/também disponível em português):
The South Centre carries out multiple activities to support developing countries with policy-oriented research, inputs and advice for negotiations and capacity building. The Report summarizes the South Centre’s activities in 2025 and highlights the contexts in which they were conducted as well as the objectives that were pursued with their implementation.
South Centre Inputs to the Intergovernmental Negotiating Committee on the UN Framework Convention on International Tax Cooperation
The Intergovernmental Negotiating Committee (INC) on the United Nations Framework Convention on International Tax Cooperation (UNFCITC) released three documents in January 2026 to inform negotiations at its Fourth Session, held in February 2026 in New York:
Co-Leads’ Concept Note (23 Jan 2026) prepared by Workstream III, presenting potential design features for dispute prevention and resolution protocol mechanisms.
The South Centre submitted inputs on the three documents on February 26 and March 6, 2026, following a call for input by the INC. The submissions are reproduced below:
OECD Two Pillar Solution: Designed to Prevent the Offshoring of High Tech Production to the Global South
By Abdul Muheet Chowdhary
The Organisation for Economic Co-operation and Development (OECD) Two Pillar solution is a tool of the developed countries designed to: a) prevent Multinational Enterprises (MNEs) in frontier technologies like clean energy, computing, semiconductors, etc. from offshoring production to developing countries, and b) minimize Global North MNEs’ taxable profits in developing countries. The recent exemption of the United States’ MNEs from certain aspects of the OECD Global Minimum Tax further strengthens these objectives. South Centre Member States and other developing countries should resist pressures to adopt the Two Pillar solution and make informed, evidence-based decisions, while considering the benefits of other simpler and more beneficial alternatives.
Taxation of digital services – A Domestic Law Solution for Overcoming Tax Treaty Barriers
By Radhakishan Rawal
Tax treaty treatment of source taxation of cross-border services continues to be an unresolved issue even fifteen years after it was recognized as a major issue within the Base Erosion and Profit Shifting (BEPS) Project. While the Organisation for Economic Co-operation and Development (OECD) Inclusive Framework’s Amount A of Pillar One does not seem to be getting finalised, at the United Nations (UN) an Intergovernmental Negotiating Committee (INC) is working on a UN Framework Convention on International Tax Cooperation which will offer a solution to the issue. The success of the UN’s initiative will depend on how many developed countries sign the Framework Convention and relevant Protocols.
This article evaluates a Domestic Law Solution to the issue which was presented at the February 2026 session of INC at New York. As per this solution, the domestic law of the source country can define the term “profits of an enterprise” to exclude consideration for digital services and thus bypass treaty restrictions on source taxation. As a result of this, the source country will be able to levy tax on such income in terms of Article 21(3) of the tax treaties signed by it provided the wording of Article 21(3) is identical to that in the UN Model Tax Convention.
The South Centre has made a submission to the Intergovernmental Negotiating Committee of the United Nations Framework Convention on International Tax Cooperation on the draft Framework Convention’s commitments, and Dispute Prevention and Resolution protocol.
The contribution addresses the priorities and perspectives of developing countries in promoting inclusiveness, fair allocation of taxing rights, stronger transparency standards, and effective and accessible dispute prevention and resolution mechanisms.
Digital businesses continue to grow and generate substantial revenue in market jurisdictions without maintaining a physical presence. They mainly rely on intangibles, user data and user engagement. International tax rules have not kept pace with these developments, leaving many jurisdictions unable to tax digital economic activity effectively. In response, countries have introduced national measures, such as Digital Services Taxes (DSTs), equalisation levies, and Significant Economic Presence (SEP) taxes, while continuing to engage in multilateral efforts. This paper examines how countries have implemented such measures. The study applies structured case studies of Colombia, India, Kenya, Nepal, Nigeria, and Tanzania. It analyzes the countries’ legal frameworks, administrative practices, and revenue outcomes, while also identifying shared features and key differences in implementation approaches. The paper explores the conceptual foundations and theoretical justifications for taxing digital revenues at source, highlighting the limitations of current profit allocation rules that overlook the role of the market. Drawing from these country experiences, the study develops a peer learning framework based on emerging best practices while recognizing the challenges in implementation. The study then proposes pathways for harmonizing digital tax measures and outlines essential design elements to inform the development of the early protocol on the taxation of cross border services (which includes digital services) under the United Nations Framework Convention on International Tax Cooperation.
Future of the UN Tax Committee under the UN Framework Convention on International Tax Cooperation
By Aisha Aize Isa, Sabrine Marsit, Abiodun Adewale Adegboye, Nyatefe Wolali Dotsevi, Anne Wanyagathi Maina and Abdul Muheet Chowdhary
The global tax governance landscape has recently undergone major shifts and is now at a pivotal momentum where demands of inclusivity, transparency and an equitable tax system are increasingly growing amongst countries. Central to this pivotal momentum is the creation of the United Nations Framework Convention on International Tax Cooperation (UNFCITC), mandated by United Nations (UN) General Assembly Resolution 78/230 (December 2023). The UNFCITC’s objective is to establish an intergovernmental platform for governance and cooperation in international taxation. This report aims at exploring the possible role of the UN Committee of Experts on International Cooperation in Tax Matters (UNTC) within the merging architecture of the UNFCITC, drawing on past lessons of efforts to democratize international tax governance.
South Centre Inputs on 2025-2029 Work Program of the UN Tax Committee
25 September 2025
The United Nations (UN) Secretary-General appointed a new Membership of the UN Tax Committee to hold office from 2025-2029. This includes Members nominated by Brazil, Cambodia, Dominican Republic, India, Jamaica, Liberia, Nigeria and Sierra Leone (all of them are members States of the South Centre). The Committee will hold its first meeting in October in Geneva, Switzerland, and will decide, among other things, the issues they should work on during the tenure of the new members. The Committee also issued a call for inputs to stakeholders to help shape this agenda.
To ensure that the four-year agenda contains topics of importance to South Centre Member States and developing countries more generally, the South Centre made a submission to the Committee which is reproduced below.
