Economic and Social Council Adopt Resolution on International Cooperation in Tax Matters, Decision Concerning Working Arrangements

The Economic and Social Council today adopted a resolution and decision on international cooperation in tax matters, as well as a decision on its working arrangements.

Adopting the tax matters resolution (document E/2017/L.5) without a vote, the Council emphasized that the Committee of Experts on International Cooperation in Tax Matters should enhance collaboration with other organizations working in international tax cooperation, including the International Monetary Fund (IMF), World Bank and Organisation for Economic Co-operation and Development (OECD), as well as regional and subregional bodies.

The Council also decided that one session of the Committee would be held in New York in the spring and another in Geneva in the fall.  The New York session would be held back to back with the organ’s special meeting on international cooperation in tax matters.

Further to the text, the Council stressed the need for appropriate funding for the Committee’s subsidiary bodies so that they could fulfil their mandates.

Thailand’s representative, speaking for the “Group of 77” developing countries and China, and speaking before the vote, said the draft resolution on the Committee of Experts on International Cooperation in Tax Matters was submitted by the Group after more than seven months of discussions between Member States.  The draft aimed to translate the mandate in paragraph 29 of the Addis Ababa Action Agenda to enhance intergovernmental consideration of tax issues.

The Group of 77 had exercised its utmost flexibility in negotiations, he said.  It firmly believed that consideration of the matter had importance in its own right and should not be linked to other issues.  His Group had compromised its long-standing position on the theme of the 2017 Financing for Development Forum to secure all relevant Member States’ engagement in the discussion process.  He urged all Member States to exercise similar flexibility.

The United Kingdom’s representative, speaking for the European Union, said adoption of the package of texts allowed the Council to conclude consultations on implementation of the agreement reached in Addis Ababa on work to further enhance resources of the Committee of Experts on International Cooperation in Tax Matters.  The Union regretted that oral statements on programme budgets had been submitted so late in the process.  They should have been released earlier to allow Member States sufficient time to consider them before taking action.

Japan’s representative said it was vital to implement the agreements of 2015, including the Addis Ababa Action Agenda, but stressed that it was inappropriate to reopen the Agenda, as it had been agreed to less than a year ago.  Japan joined the consensus based on recognition that the draft resolution would not cause any change to the substance of the Agenda.  Japan looked forward to collaborating with other Member States to ensure a meaningful outcome to 2017’s Financing for Development Forum, but was disappointed that the oral statement had been presented just before the adoption of the resolution and not earlier.

Antigua and Barbuda’s representative, associating himself with the Group of 77, and speaking after the resolution was adopted, said important players had worked diligently to bridge gaps and gain consensus on the resolution.  The process had been difficult, but common interests and the determination to agree on the future work of the Committee was important enough for consensus.

By the tax matters decision (document E/2017/L.6), adopted without a vote, the Council decided the Committee’s twelfth session would be held in Geneva from 11 to 14 October, and also approved its agenda.  Topics discussed during the session would include profits from ships or aircraft in international traffic, taxation of development projects, as well as extractive industries and international goods trade.

The Council also decided that the thirteenth session of the Committee would be held in New York from 5 to 8 December and that the Council’s special meeting on international cooperation in tax matters would be held in New York on 9 December.

The Russian Federation’s delegate, speaking before the Council took action on the second decision about its working arrangements (document E/2017/L.7), said he could not agree to and was not ready for its adoption.  He suggested that the Council defer consideration of the decision until it had consensus.

Finland’s representative, speaking for the European Union, said the three documents before the Council formed a clear package for well-known reasons.  He requested that action be taken on the package at the current session.

The representative of Brazil, associating himself with the Group of 77, said that he firmly believed that all should work towards consensus with a view to constructive work in the future.  The Council should not jeopardize consensus on the decision.  It was close to consensus and should not put the decision to an action before making every effort to achieve consensus.

South Africa’s delegate, associating himself with the Group of 77, said the international community must ensure that commitments made in the 2030 Agenda for Sustainable Development and other agreements made in 2015 were met.  Some delegations did not support the mandate to work on tax matters.  The proposal to hold the Committee’s meeting in May was not viable and the procedure was flawed.  The issue of the next Forum should have been dealt with meticulously and viewed as an important follow-up.

Guyana’s representative said the Council had been seized of the package of documents for a considerable period of time.  At the end of consultations, a general agreement had been achieved and all delegations were willing to proceed with the package except one.  The decision’s elements had been considered at length and the organ was in a position to move forward.

The United States’ representative said negotiations had been difficult and time-consuming, but he expressed pleasure that the Council had reached the place it had.  The organ should take action today.

Japan’s delegate, associating himself with the European Union and the United States, said it was time to advance the process.  The Council was in a position to go ahead with the drafts.

As no agreement was reached about action on the draft decision, the President called a recess for consultations.

After consultations, the President stated that there remained a disagreement on the way forward.  He had been firmly advised that the decision could be tabled, and if there were delegations who opposed it, they could request a vote, as had been done in the past.  He proposed that the Council proceed to action on the draft decision and asked if any Member State wished to make a statement before the action.

The Russian Federation’s representative, requesting a “no action” motion, stated that maximum flexibility shouldn’t mean an abandonment of principle.  There remained at least seven months to resolve the issue.  To those arguing that the Financing for Development Forum could not take place at the end of April or May because there would not be necessary data, he asked whether they were waiting for data from the OECD, and whether they could not instead acquire information from other bodies.  Voting now would be taking a serious rather than formal decision that would lead to the lowering of the status and authority of the Council.

Brazil’s representative said he favoured the package of documents, even though negotiations for a “package” were inappropriate.  In that case, however, the package was a necessary evil in reaching consensus on the resolution.  He favoured consensus, as the Council had a long way to go to implement the 2030 Agenda.  He was against “no action” and did not want to see the decision postponed.

Finland’s representative, speaking for the European Union, encouraged all to vote against “no action” so the package could be agreed upon today.  Negotiations had been long and painful and now was the time to take action.

Chile’s delegate said he would vote against “no action”, as there was no reason to postpone the decision.

The Council then held a vote on the “no action” motion.  The motion was defeated in a vote of 3 in favour, 38 against with 1 abstention.

China’s representative, speaking after the vote, said the Council had failed to reach consensus on the draft decision after seven months of negotiations.  He did not want to postpone the decision, but encouraged delegates to reach consensus on future issues.  That was why he had voted in favour of “no action”.

The Russian Federation’s delegate said there was no other solution than to put the draft decision to a vote.  The legal office had not explained to what extent voting on it was possible in a meeting of the Economic and Social Council.

Chile’s delegate said financing for development was crucial in following up the 2030 Agenda and called on Council members to vote in favour of the draft decision.

Adopting the decision in a vote of 40 in favour to none against, with 2 abstentions, the Council reaffirmed that its annual forum on financing for development follow-up would be dedicated to discussing follow-up and review of financing conference outcomes and means of implementation of the 2030 Agenda.

By other terms, the Council decided its 2017 forum on financing for development follow-up would take place from 22 to 25 May and would include the special high-level meeting with the Bretton Woods institutions, the World Trade Organization (WTO) and the United Nations Conference on Trade and Development (UNCTAD).

The Russian Federation’s representative, speaking after the vote, congratulated the Council on adopting the decision, adding that it had made the mistake of going beyond its mandate.

The Council will hold a joint meeting with the Second Committee (Economic and Financial) at 10 a.m. on Friday, 7 October.

Leave a Reply