About

Rationale

Achieving the Sustainable Development Goals under the Agenda 2030 development framework requires countries to mobilize revenues at the domestic level, including through raising tax revenues. However, the interest of countries, especially developing countries, in seeking a more effective and just regime of international taxation has been hampered by several challenges in the current international framework that requires more transparency, equity and strengthening of the rule of law. This has led to the recognition and a global consensus on the much needed reform of the international tax regime.

Although certain initiatives, such as the Base Erosion and Profit Shifting (BEPS) project under the umbrella of the Group of Twenty (G20) and the Organization for Economic Co—operation and Development (OECD), recognize the existence of a need for reform, they have not considered some of the most critical needs of developing countries and fall short at increasing developing country participation over the standards and decision-making in international tax policy. The current international tax framework has exhibited a strong tendency to ignore developing countries’ experiences and innovations in tax policy and administration.

In response, the South Centre has launched a major effort to build a working network among developing country officials to highlight and share practical solutions emerging from developing countries, and to strengthen their participation in international fora and standard setting negotiations. The South Centre Tax Initiative (SCTI) is the current flagship program of the South Centre for promoting cooperation among developing countries on international tax matters. The program aims at the important need to increase collaboration among developing countries on international tax issues and reform processes.

With a focus on network building, the Tax Initiative is centered on the convening of an Annual Forum of developing country officials working in tax policy and administration, and to promote and support intensified, better coordinated, and more institutionalized approaches to South-South cooperation in tax matters, so as to enable developing countries to become full participants for substantive norm-setting in international taxation matters.

Approach

As an intergovernmental organization governed by developing countries, the South Centre has a unique standing to work with developing countries for overcoming the challenges they face and drawing on strengths from their experiences.

The SCTI builds on the reality that developing countries, such as India, Brazil, China, Argentina, among others, have been undertaking their own innovations in tax policy, in line with their capabilities and their need to obtain more tax revenues from economic activities that take place in their own jurisdictions. Therefore, a major effort to build a working network among developing country officials will allow for the sharing of experiences and practical solutions for taxation in developing countries, as well as for strengthening their participation, and providing a coordinated approach in international fora.

With a focus on network building, the SCTI is also meant to improve research capacity on taxation issues in the developing country context, strengthen and coordinate common negotiation positions in international fora, and establish mechanisms among developing country tax authorities to arrive at agreed norms and actions at the regional and global level to achieve a more effective and just system of taxation.

Objectives

The South Centre is responsible for undertaking a wide range of activities for the realization of increased international tax cooperation among developing countries. The specific objectives under this overarching goal include:

• Improving research and analysis by developing country authorities and academics, and upgrading local capacity to respond to their own needs towards the design of effective tax policies for their own countries, drawing on lessons and experiences from other developing country experiences;
• Strengthening developing countries’ engagement and coordination in international tax cooperation forums and activities such as in the OECD-G20 processes, the United Nations’ tax cooperation work, and regional cooperation activities; and
• Providing international tax cooperation spaces among developing country authorities to discuss and facilitate the discussion on the design of agreed norms and mutual action at the regional and global levels.

The South Centre is an intergovernmental think tank of developing countries with currently 55 developing country member States from Africa, Asia and the Pacific, and Latin America and the Caribbean, based in Geneva, Switzerland.

It seeks to promote the common interests of developing countries while recognizing and reflecting their diversity.

The main activities of the South Centre include policy research and analysis, technical assistance and capacity building activities, support in international negotiations, and the promotion of South-South cooperation through the sharing of views and experiences.