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FFD photo

The outcome document of the 3rd Financing for Development Summit was adopted on 16th July without intergovernmental tax body or new financial commitments. The developed countries rejected the proposals made at last hours of negotiations for the improvements to the UN tax committee, and a global tax body.

Developing Country Proposals Rejected

On Wednesday key improvements to the language on the UN Committee on tax experts was suggested by the South African chair of the G77, and Ethiopia.  The proposals included suggestions to re-designate the committee as the Intergovernmental Committee of Experts on International Cooperation in Tax Matters and to increase the resources allocated.

Among other things included in the proposals was the members of the committee to be directly nominated by governments through the respective regional groups and appointed by ECOSOC, to be drawn from the fields of tax policy and tax administration, and to continue to act in their expert capacity.

The proposals also invited ECOSOC to finalise, no later than at its 2016 Special Meeting on International Cooperation in Tax Matters, and to turn the Intergovernmental Committee of Experts into a universal body with equitable participation of developing countries. However these proposals were rejected by the developed countries.

Lack of Transparency, Undermining UN’s Potential

The developing countries most affected by illicit financial flows, tax evasion and avoidance and transfer mispricing by large corporations should have an equal say at an international negotiation table on global tax rules. But this was not highlighted in the outcome document.

The outcome is further criticised as undermining the potential of the UN as the world’s most universal and inclusive body. The document does not present new financial commitments aside from a standard  reinstatement of existing aid commitments. It does not scale up ODA nor ensure new and additional ODA, particularly for climate finance.

However, the document does succeed in establishing a Technology Facilitation Mechanism in the UN that supports the achievement of the SDGs, as well as a follow-up forum for FdD.

Criticism on the discussions  also highlight a lack of transparency in the nature of discussions.

CBDR & Post 2015 Agenda

It was decided to reaffirm the Rio Principles as a whole on common but differentiated responsibilities (CBDR) instead of a specific reference to CBDR, as sought by the whole of G77. However the text highlights CBDR in reference to climate change but not as an explicit underlying principle for the overall agenda.

When it comes to integrating FfD with the post-2015 agenda with an associated but separate follow-up and review mechanisms, it was decided that a Forum under the ECOSOC will review both the FfD and the Means of Implementation and Global Partnership of the post 2015 Development Agenda. It will report to the High Level Political Forum, which is the review body for the post-2015 agenda.

Civil Society and FfD

Civil society organisations have released powerful statements on the FfD summit, and the need for countries to take actions. The governments in Addis Ababa have acknowledged this, and the powerful media attention on the intergovernmental tax body that has been generated by civil society efforts.  They have further noted that global public opinion is on the side of the tax body.

Reference: The summary is based on the article published on the outcome of the FfD by Third World Network: “The Third International Conference on Financing for Development: Outcome document adopted without intergovernmental tax body or new financial commitments”  http://www.twn.my/