The UN recently published a policy brief on Reforms to the International Financial Architecture. This includes various reform proposals broken down into different actions, including three actions to redesign the global tax architecture for equitable and inclusive sustainable development as follows:

Action 15: Strengthen global tax norms to address digitalization and globalization through an inclusive process, in ways that meet the needs and capacities of developing countries and other stakeholders

• Explore options to make international tax cooperation fully inclusive and more effective.
• Simplify global tax rules to benefit underresourced developing country tax administrations.

General Assembly resolution 77/244 on the promotion of inclusive and effective international tax cooperation at the United Nations, adopted in 2022, has initiated intergovernmental discussions on options to strengthen the inclusiveness and effectiveness of international tax cooperation, including the possibility of developing an international tax cooperation framework or instrument that is developed and agreed upon through a United Nations intergovernmental process, taking into full consideration existing international and multilateral arrangements. To better equip developing countries in their fight against tax base erosion and profit shifting, easily administered solutions need to be developed. Developing countries prefer simple approaches, such as digital services taxes or withholding taxes, over more complex strategies. While not easy to achieve, such simplification of tax rules benefits the effectiveness and sustainability of the international tax system. This benefit accrues to all stakeholders in tax systems. The Secretary-General will present options for the consideration of Member States in his report to be submitted pursuant to resolution 77/244.

Action 16: Improve Pillar Two of the proposal by the OECD/G20 inclusive framework on base erosion and profit shifting to reduce wasteful tax incentives, while better incentivizing taxation in source countries

• Significantly increase the global minimum corporate income tax rate to be close to the statutory tax rates in most developing countries and give preference to source country taxation.

The proposal for a minimum corporate income tax rate is welcome, but the minimum is likely to become a maximum due to tax competition. Developing countries have repeatedly called for setting the global minimum tax rate at a significantly higher level that is more in line with statutory tax rates prevailing in their countries. The agreement needs to give first priority to source country taxation and include stronger rules to eliminate tax base erosion.

Action 17: Create global tax transparency and information-sharing frameworks that benefit all countries

• Create non-reciprocal tax information exchange mechanisms to benefit developing countries.
• Publish beneficial ownership information for all legal vehicles.

The international community should develop mechanisms to automatically provide banking and financial account information on a non-reciprocal basis to developing countries at risk of illicit financial flows, thereby allowing them to benefit from existing tax transparency mechanisms, while gradually developing the capacity to fully participate in the established mechanisms.

International agreements should be amended to support wider use of information exchanged on the basis of tax treaties to cover legitimate non-tax uses by country authorities, for example in the prosecution of non-tax financial crimes. As a first step, country-by-country reporting of multinational enterprises should be reformed to make information publicly accessible as part of reformed corporate reporting.

Countries should strengthen beneficial ownership transparency systems with broad coverage, automated verification, and publication of information. Such registries would be game changers in efforts to properly tax high-net-worth individuals and multinational enterprises.