The upcoming negotiations for the UN Framework Convention on International Tax Cooperation (UNFCITC) in Nairobi and the 30th Conference of the Parties to the UN Framework Convention on Climate Change (COP30) in Belém present an opportunity to align global tax reforms with climate finance, promoting economic democracy to ensure that resources are mobilized in a just and equal manner, particularly to marginalized communities.
International tax reforms and climate finance must be aligned to promote economic democracy, with local civil society playing an active role in advocating for policy changes, ensuring that the voices of marginalized communities are heard and that resources are managed transparently and equitably.
International policy recommendations
1. Integration of environmental and social justice in tax rules
- Incorporate binding commitments to technology transfer and capacity building in tax administrations within the UN Tax Convention, ensuring that tax reforms are politically contextualized and do not penalize countries pursuing redistributive, progressive fiscal policies.
2. Enhanced transparency mechanisms
- Establish international asset registries to increase transparency and combat tax avoidance, ensuring that the wealthy contribute their fair share to public finances.
3. Support global taxation of the super-rich
- Spain and Brazil advance coordinated taxation of high-net-worth individuals through international cooperation and transparency. This model should inform UNFCITC negotiations to ensure global wealth contributes fairly to sustainable development and climate finance.
Regional policy recommendations
1. Progressive regional taxation
- Implement a regional minimum tax on the super-rich, with rates between 1% and 5% on wealth exceeding specified thresholds, as proposed for the EU by Oxfam.
National policy recommendations
1. Strengthening anti-corruption measures
- The problem is not tax collection or monitoring in many countries, but what happens after it. Waste and mismanagement of public funds are key drivers of social deprivation and injustice across many countries in the Global South. Governments must allocate adequate resources to independent anti-corruption bodies and special tribunals to combat misuse of funds.
- Enhance transparency and accountability in the management of public resources through independent audits, public reporting, and the establishment of grievance mechanisms to prevent the misuse of funds.
- Provide support for civil society organizations to monitor and advocate for the effective use of domestic resource mobilization and climate finance, ensuring that these resources are used transparently and equitably.
2. Implementation of progressive taxation
- Introduce progressive taxes on the profits of polluting industries and wealth taxes rather than regressive tax – with revenues earmarked for public services, welfare and employment.
3. Promotion of economic democracy
- Ensure that domestic taxation and public finance contribute to economic democracy by involving communities in decision-making processes, promoting inclusive development, and reducing inequalities.
POLIFA 