From the OECD to the UN: International Tax Reform and the Role of South Africa in the G20

This briefing note critiques the OECD's Two-Pillar international tax framework as undemocratic and biased toward high-income nations, arguing it fails to curb tax abuse by MNEs and the super-rich. It advocates for a UN Framework Convention on International Tax and Cooperation to ensure equitable participation and revenue mobilization for developing countries. The author urges South Africa to leverage its 2025 G20 Presidency to support the UN process and establish minimum global taxation standards for High Net Worth Individuals.

• Global revenue losses from cross-border tax abuse are estimated at $492 billion for 2024, with $347.6 billion attributed to corporate tax abuse by MNEs and $144.8 billion to undeclared assets of wealthy individuals.
• Africa is disproportionately affected by harmful tax practices, losing $1.3 trillion to illicit financial flows between 1980 and 2018, and $88.6 billion annually through capital flight.
• The OECD's Two-Pillar solution is criticized for being developed undemocratically and benefiting high-income countries. Pillar One is limited to companies with turnover over $20 billion, and estimates suggest developed economies would receive 77% of additional revenue, while least developed countries would receive nothing.
• Pillar Two's Global Minimum Tax (GMT) of 15% is viewed as insufficient compared to the average rate of 25% in most countries. Furthermore, because the ultimate parent entity has the first claim on undertaxed profits, 80% of redistributed profits are estimated to benefit high-income countries.
• The United States has effectively blocked the implementation of Pillar One; on January 20, 2025, President Donald Trump ordered the US Treasury to prepare protective measures against countries using tax rules that have a "disproportionate impact" on US MNEs.
• The UN Framework Convention on International Tax and Cooperation is presented as a democratic alternative where all countries participate equally. Negotiations in 2024 and 2025 have identified two early protocols: taxation of income from cross-border services in the digital economy and tax dispute prevention and resolution.
• The document calls on South Africa to use its 2025 G20 Presidency to advance an African agenda by supporting the UN Convention and negotiating minimum taxation standards for High Net Worth Individuals, building on the impetus from Brazil's presidency.

APA

Institute for Economic Justice (n.d.). From the OECD to the UN: International Tax Reform and the Role of South Africa in the G20. https://iej.org.za/wp-content/uploads/2025/06/Briefing-Note-International-Tax-Reform.pdf

Chicago

Institute for Economic Justice. From the OECD to the UN: International Tax Reform and the Role of South Africa in the G20. n.d. https://iej.org.za/wp-content/uploads/2025/06/Briefing-Note-International-Tax-Reform.pdf.

Wikipedia

{{cite report |author=Institute for Economic Justice |title=From the OECD to the UN: International Tax Reform and the Role of South Africa in the G20 |url=https://iej.org.za/wp-content/uploads/2025/06/Briefing-Note-International-Tax-Reform.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{instituteforeconomicjusticendfrom, author = {{Institute for Economic Justice}}, title = {{From the OECD to the UN: International Tax Reform and the Role of South Africa in the G20}}, institution = {Institute for Economic Justice}, url = {https://iej.org.za/wp-content/uploads/2025/06/Briefing-Note-International-Tax-Reform.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }