Developing Nations Want Greater Tax Role: UN Official

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By Sony Kassam

Developing countries’ increasing demand for involvement in setting global tax norms is propelling the UN to consider expanding its tax experts committee and giving more control to smaller nations, a UN official said.

Being involved in the OECD’s Global Forum on Transparency and Exchange of Information for Tax Purposes and Inclusive Framework is useful to developing countries, “but it won’t be enough,” Michael Lennard, chief of the United Nations’ international tax cooperation unit, said during an Aug. 31 video conference at the International Fiscal Association congress in Rio de Janeiro.

The growing demand for participation in global tax matters “will cause some disruptions” within the Organization for Economic Cooperation and Development and the UN. “Eventually, the UN will have to consider, ‘is 25 members enough?’ ” Lennard said about the organization’s 25-member committee of tax experts.

The Committee of Experts on International Cooperation in Tax Matters—a subsidiary body of the UN Economic and Social Council—helps promote international cooperation among tax authorities and makes recommendations on emerging tax issues.

The nations represented in the committee are: Colombia, Djibouti, India, Zambia, Nigeria, Japan, Poland, Ghana, Vietnam, Thailand, Jamaica, Kenya, New Zealand, Argentina, Brazil, the Netherlands, Switzerland, Russia, Canada, Liberia, Germany, Ecuador, Sweden, China, and Singapore.

Finding a Balance

Although countries such as India, Brazil and China “will always have a very important role,” Lennard said, “a lot of smaller countries will demand roles and want their experiences reflected.”

Lennard said setting the norm will be slower than what people have seen in the past because of a larger number of countries involved. A slower pace will be beneficial to ensure consistency, which will ultimately be good for businesses, he said.

“There’s nothing worse than countries signing up for something but not implementing it in practice,” Lennard said. “We have to try to get the balance between fast norm-setting and norms that are sticky—norms that will be seen as having ownership through the wider world.”


Source taxation approach is another reason for increasing involvement of developing countries, Lennard said. The approach, which is followed more in the UN model tax treaty than in the OECD model, is becoming more attractive to developed countries, he continued.

“We’ll see some conversation between developed and developing countries, which is good,” he said. “It’s good to not have the whole divide between the two.”

Further, withholding taxes will become important and useful for developing countries to get the revenue they need for development, according to Lennard. Still, a broader discussion will be needed on how to maintain evolving tax systems that meet those revenue requirements but are still fair to tax planners, he said.

“I think that’s an important discussion that has been avoided,” Lennard said. “Hopefully we can have good withholding tax systems for all.”

‘Not a Spaghetti Bowl’

Lennard also said he’s optimistic about the future and the creation of sound policy choices.

“With the support of governments, of business, of NGOs, of academics, we can actually end up with global tax norms, which are not chaotic, not a spaghetti bowl, but are actually effective in recognizing the legitimate realities and different stages of governments between countries,” Lennard said.

Upcoming Projects

In October, the UN expects to publish a new version of the UN transfer pricing manual and a new handbook on extractive industries, Tatiana Falcao, formerly part of the UN’s tax experts committee, said during the panel.

New projects will be influenced by the practices of developing countries, Falcao said. These projects include guidance on capacity development, carbon taxation, and dispute resolution.

The tax committee expects to have two new projects implemented in the “very recent future” regarding dispute resolution and how countries can solve issues without resorting to arbitration, with “extensive reference to the use of litigation,” Falcao said.

The first dispute resolution guide will be geared toward countries that have “almost no experience” with mutual agreement procedures, while the second guide will be a revision to MAP guidance for countries with prior experience, she said.

To contact the reporter on this story: Sony Kassam in Rio de Janeiro at

To contact the editor responsible for this story: Cheryl Saenz at

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