Third Session of the Intergovernmental Negotiating Committee on the United Nations Framework Convention on International Tax Cooperation

Good morning. Would I ask everyone to have a seat? We will start now. Please have a seat. We will start now. Good morning everyone. We are starting our third day of informal discussions. In the first two days we have done till article seven. Uh today we are starting with article eight. Uh so there is about the harmful tax practices and I'm not going to consume time in long introductions.

I will hand over the floor to my.

Colleague, the co lead of this work stream, Daniel, to proceed with the discussions.

Thank you.

Good morning, distinguished delegates. And thank you for the great inputs you've been providing over the past few days. It's given us a lot of food for thought and I believe that we'll continue in the same vein today to come out with analysis and comments that will help further shape this document. So the slides are up. We are starting with Article 8 today, that's harmful tax practices. What we have here for paragraph one, the state parties recognize that harmful tax practices undermine the ability of all countries to tax income fairly. particularly income derived by multinational enterprises that can shift assets and incomes across borders. International cooperation at global and regional levels is therefore necessary to address such practices and safeguard equitable taxation. The State Parties agree that any tax incentives provided by State Parties should be substance-based, linked to investment or performance, and not merely profit-based. Three, accordingly, the state parties agreed to cooperate in developing effective tools for combating harmful tax practices, including, A, through sharing information regarding revenues, assets, employees, and reported income on a country by country basis, taking into account both the needs and the different capacities of the state parties, and B, by introducing appropriate measures, which may include minimum taxes on business activities originating from jurisdictions with harmful tax practices. So these are the paragraphs that we have in the text as we developed it based on our discussions. We open it for comments, please. Should I take it that we are fine with it assistance? I don't see any comments. Right, Zambia please.

Good morning, Chair, good morning, colleagues, good morning, Excellencies, Member States and colleagues. to break the ice so that we ensure that we give our input. I'm speaking on behalf of the Africa group and once again colleague and chair and the secretariat, we thank you for the text provided. From the Africa group, whilst we agree that Harmful tax practices indeed an issue that arose, base erosion and goes to harmful tax competition. We have the view that the current text needs enhancing and we have preliminary suggestions on how we can refine this text. And therefore, in terms of our preliminary interventions on how this text can be revised, is that paragraph 1, we think it's two headed and some of the issues that paragraph 1 is covering are not necessarily commitments. So we have a proposal and also in terms of the commitments we would want that the measures that are taken are quite effective. We have a proposal in terms of paragraph 1 and if you can indulge me, where we rephrase it to say the state parties agree to take effective measures to address harmful tax practices and full stop. The other parts we then suggest that it's to be deleted. We also then have a suggestion that we We refined the paragraph which says according the state parties agreed to cooperate in terms of addressing effective harmful tax practices through the development or implementation of effective tools. The tools here we've not gone into listing the tools but it's high level and those tools that can be developed or implemented in addressing harmful tax practices, our view that those tools will encompass both policy measures that states can come up with, but also administrative measures. In combating harmful tax practices, we know policy measures are key, but also administrative measures are key. But at this point, our preliminary thinking is that we can put it at high level and just say that state parties will commit through the development or implementation of effective tools that will address harmful tax practices. The other one is also to say through effective-- by carrying out necessary reform of their tax regimes is also another commitment because we know if we have to address harmful tax practices, states will have to check and carry through necessary forms of the tax regimes. But key to this, Excellencies and member states, is that we need the definition of harmful tax practices so that at least once we have a definition of harmful tax practices, it's easy to identify them, to have a criteria of identifying them and how to address them. But we know at this point and in this session and as agreed, we're not looking at the definitions, but we put it on record that when we come to Article 3, I think it's the one that will handle definitions. It'd be very important that we come up with a definition that illustrates and gives a scope of what constitutes harmful tax practices so that as we commit on implementation of effective tools, on carrying out necessary reform, the tax incentive regimes, we are aware of what have we defined harmful tax practices to be. The other issue that we want to rephrase is through the effective sharing, of relevant information. We delete the part that deals with regarding revenues, assets, employees and taking into account both the needs and different capacities of the states. But we put it at high level that in handling harmful tax practices we need effective sharing of relevant information. That information may be on regimes, such information may be on information that is not publicly available. We know in some states you have that can be taxpayer specific, can be rulings that are taxpayer specific but they are not in the public domain, but they also might be regimes that are public domain that can still be shared. But without going into the detail, our suggestion is that we commit to having effective sharing of relevant information as one way in which we cooperate as member states that were agreed to this framework in terms of how we address harmful tax practices. The other one is also by introducing appropriate measures which may include measures to ensure that multinational enterprises or relevant taxpayers pay minimum amount of taxes. I know I think the issue of the use of taxpayers delegates have questioned it but these are our preliminary comments in terms of how we can refine the harmful tax practices. Our view is we try to make it high level and also see how we can commit in terms of ensuring that we fight these harmful tax practices. And on behalf of the Africa group I submit but my colleagues from member states from Africa as you come in if they have left out anything that was discussed please you can highlight that so that we provide the appropriate position for respective member states and for Africa group. I submit, Chair.

Thank you, Zambia. United Arab Emirates, please.

Good morning, everybody.

Thank you, Chair.

So my comments are more general.

So we all agree about tackling harmful tax practices, very important.

But my question is more to maybe help facilitate this discussion. It's not clear to us what is the intended outcome.

Or purpose of this article in terms of what the Secretariat has drafted?

Why we say that, we think we have concerns that there's significant overlap with existing forums.

Such as the FHTP, Code of Conduct, the CBCR.

Our question is, is this intended to work in parallel, is it to complement what already exists? And then we can maybe discuss that.

Thank you.

We have mentioned earlier that when it comes to relationship with other treaties and other articles, these will be discussed later. But then, as a committee, the TOR has asked us to discuss harmful tax practices and come out with a commitment on it. So that's what we will do. At the end of the day, we will decide how we relate to other things. Thank you. United Kingdom, please.

Thank you very much.

Good morning, everyone.

UK, of course, supports cooperation to address harmful tax practices. Like the UAE, we note the work of relevant international bodies. such as the Forum for Harmful Tax Practices on this. We too would welcome clarification on how this commitment would promote coherence with the work of that forum. I note the point about article 12, but I think it is difficult to discuss the form of the commitment in isolation from article 12. so I think that would be it would be helpful to bring those two conversations together. We also suggest removing paragraph 3A and 3B as elsewhere we think keeping the commitments high level should mean not prescribing specific policies with that being a matter for the conference of the parties through a protocol or other instrument. With regards to the specific policy suggestions We foresee a risk that they could place an excessive burden on low capacity jurisdictions, particularly small island developing states. But of course, we'd welcome their views on that.

Thank you.

Thank you, UK. Yesterday I raised an issue that when we are talking about capacity, we should please indicate whether we are talking about skills, logistics, financial, whatever, so that makes it a bit clearer. because capacity can be very broad and can be read in different ways. So I'll be grateful as we go along that if we want to refer to capacity, we state exactly what capacity we are talking about so that we can capture it properly. Otherwise, we have a problem with that. Thank you. And to UK, your earlier question, I think the response I gave to UAE is the same I'll give to you. Mexico, please.

Thank you, Mr. Chairman.

Good morning to everyone.

As we have mentioned in other articles.

In a similar way, the first paragraph of this commitment appears to be merely a preamble. That is, it addresses general issues rather than outlining specific agreements. We must also analyze how this commitment will avoid duplicating the work already being done in other forums.

In this regard, the OECD Forum on Harmful Tax Practices has been reviewing preferential tax regimes since.

Its inception in 1988.

Similarly, it has been reported this year that action five of the BEPS project on harmful tax practices has made significant progress in both developed and developing countries. In 162 preferential tax regimes have been reviewed to support them in detecting and eliminating harmful tax practices. In the cases where such regimes were found, 93 of these have been modified or abolish.

Thank you.

Thank you, Mr. Co. India, please.

Thank you, Chair. Harmful tax practices continue to undermine the global fairness in taxation by facilitating the artificial shifting of income and assets across jurisdictions. At the same time, any international approach to address these practices must carefully balance the need for equitable taxation with legitimate concerns of fiscal autonomy of the states. India in this regard welcome the paragraph one of article eight which rightly recognizes the importance of international cooperation to safeguard equitable taxation. We fully support the shared objective and believe that the collective efforts are essential to strengthening the integrity of global tax system. With respect to para two, we feel that the current language is somewhat prescriptive in nature. Our view is that the focus should be on developing a cooperative framework based on shared principles and standards rather than specific policy instruments such as substance-based incentives. This would allow all state parties regardless of their level of development to participate meaningfully in developing the global tax norms. In this regard, we would like to propose the following formulation for paragraph two. The state parties agree to develop and apply common principles and standards to identify harmful tax practices that distort cross-border taxation or erode the tax base of other jurisdictions. Coming to para 3a, Developing mechanisms that encourage timely, so here we propose that accordingly, so it is written accordingly the state parties agree to cooperate in developing effective tools for combating harmful tax practices through timely sharing of information as we believe that timely sharing of information is vital to fulfill the purpose of prevention of harmful tax practices. In addition to that, we also propose an assessment of the potential effects of this harmful tax practices as one of the key point of para 3. Turning to para 3, India believes that our collective efforts should also seek to strike a balance between fairness and competition. While safeguarding equitable taxation is a shared priority, it is important that we do not impede legitimate tax competition. So in this regard, we suggest the following wording for paragraph 3B, that in pursuit of these objectives, the state parties aim to safeguard equitable taxation globally without impeding legitimate tax competition. Thank you.

Thank you, India. Singapore, please.

Thank you, Chair. First, we'd like to express our appreciation to the co-lead secretariat for this revised draft, which in our view incorporates much of the feedback that was provided during the intercessional meetings. And we think the current draft is a significant improvement from the previous iteration. And we think it's largely workable as a basis to progress the text further. Now I note that this article interacts with existing forums such as the Forum of Harmful Tax Practices and the existing country-by-country reporting frameworks. I note your clarification that this interaction will be discussed later. I look forward to that with a view of minimising duplicative or conflicting work. Now turning to the current text, We have just a few more suggestions which we hope can be taken into consideration in the next iteration. First, in paragraph two, we think the words "and not merely profit-based" are not necessary and may be deleted. I believe there's consensus that we want to encourage any tax incentives provided by state parties to be based on substance and linked to investment or performance. and the first part of this sentence already achieves this and nothing is lost by deleting the last five words. In paragraphs three and three B, we would suggest changing the word developing and introducing to exploring since it's not quite clear at this point what the effective tools or appropriate measures are. and I think these would largely depend on individual countries' circumstances and such a wording as I have proposed, exploring, does not in any way limit what countries may eventually do including enacting relevant domestic policies and in the same light, I will also suggest deleting the words including minimum taxes since it is simply an example and the term appropriate measures is not exhaustive in the first place Next, on paragraph 3, I would suggest amending the words "business activities originating from jurisdictions with harmful tax practices" to the words, and I quote, "business activities benefiting from harmful tax practices". I think this is a more surgical and less punitive approach and would inadvertently, would avoid inadvertently penalizing legitimate businesses that have nothing to do with harmful tax practices in the first place. So as not to undermine economic growth. Thank you.

Thank you, Singapore. Switzerland, please.

Thank you, Mr. Kohli. Good morning, dear colleagues. At first, I agree with many previous speakers that paragraph one should be marked and it should be considered to move that statement to the preamble once the preamble will be drafted. But by the way, we of course agree with the statement in paragraph one. Regarding the second paragraph, I would request some more explanation regarding the understanding of the difference between profit based tax incentive and tax incentive linked to performance, substance based tax incentives linked to performance that would help me. And further on also regarding the second paragraph, we would like to point out that tax incentive can also indicate a profit based tax incentive. be a valid cause and that not any tax incentive must necessarily negatively affect the tax base of other countries. For example, if a tax incentive is designed to encourage ecological or sustainable behaviour, then we would think that this should not be harmful and therefore we propose to have a carve out for tax incentives that have not the potential of any negative spillover, international negative spillover effects and we will think of a proposal for awarding. There is also already a lot of work on that issue from the FHTP. but also the proposal the distinguished colleague from India presented before is something that we would consider. And then finally concerning paragraph three, we are of the view that the provision, the wording as it reads now ignores the fact that the instruments mentioned in paragraph one being the country by country reporting are already in place and applied between many countries. We of course also understand that the implementation may be challenging for developing countries also for small countries like mine and for these reasons we propose to replace in the header of the paragraph developing by fostering And finally in subparagraph A we suggest to add after country by country reporting the language according to the agreed standard and to add in the end of subparagraph one also the wording as well as enabling all states parties to benefit from such exchange. These proposals will then also follow in writing by 5th of December. Thank you very much.

Thank you. Switzerland and Norway, please.

Thank you, Mr. Colley, and good morning to everyone. So we appreciate all the efforts that have been put into this draft provision and trying to capture the concept of harmful tax practices. Harmful tax practices and addressing them is an important issue for us and We strongly value the efforts that have been going on for many, many years in other fora. At the same time, we also believe that the issue of harmful tax practices has a place in this convention. However, like others, we think it's important to preserve the progress that has been made elsewhere and also to allow room for developing further the work of those for us. And that's more of a cross-cutting issue for us here, but it also applies in the context of harmful tax practices. Coming back to the concept of harmful tax practices, this is something, the content of, or what you would identify as a harmful tax practice, is of course dynamic and depending on development as we go. So for that reason, we think it's quite important to avoid a static definition of harmful tax practices. And while it is important for these discussions that we have some common basis of what we think harmful tax practices are or have as a general hallmarks, maybe it's not necessary to go deep into that discussion at this moment. Now, specifically regarding the text here, we think that there's still some work that needs to be done. We have some initial remarks on the text and we'll return to this possibly with specific drafting proposals in our written input. Like others, Perhaps paragraph one, it captures in the first sentence, I think, something that most countries would agree on, but like others, we think that it may be a better place for it in the preamble. In paragraph two, we We acknowledge that the issue has been mentioned in the work streams and also in the August session. And while we broadly agree with the principle that is stated there, we think perhaps we should strive to keep this commitment at a high level. And I think we would agree with many of the things that the African group and also the UK mentioned here. and we take note of the text proposals that have been presented earlier and will review them in due course. We also believe that with respect to paragraph 3, it's not necessary to go into specific detail and list specific measures because listing specific measures in the Convention in general it has some upsides, but it also has potential drawbacks because you may risk leaving out things that emerge later on and that you would like to address. So for now, we suggest keeping this commitment on a very high level and just make clear that it is a basis for addressing issues as they emerge in protocols or perhaps other measures that can be decided by the Conference of the Parties. Thank you. Okay.

Thank you. And before we go on, I want to read something from the terms of reference, paragraph 22, just to put a rest on the suggestions that are coming up. It says, throughout its work, The intergovernmental negotiating committee should take into consideration the work of other relevant forums, potential synergies. Oops. Potential synergies and the existing two strengths, expertise and complementarities available in the multiple institutions involved in task cooperation at the international, regional and local levels. So please, the TOR has talked about this already. And that's why I'm saying that it's something that we'll look at, it's something that is there, it's something that should be at the back of our minds as we are going along. Thank you. Russian Federation, please.

Thank you, Mr. Chair.

My intervention will be in Russian.

Good morning, distinguished colleagues, good morning, members of the delegations. We have two comments we wish to make. The first is a comment which is general in nature, one concerning the very fact of whether we actually need this article here, and we back We back this decision regarding the inclusion of this article in the draft convention, especially so, as during the preliminary work carried out on the terms of reference document, we reached agreement that we would also consider this issue and to devote a separate protocol to this very topic. So this is my general comment. This article will require certain changes, including editorial changes, and one of these changes which we would like to propose could serve as a response to comments which were made by other distinguished colleagues who took the floor before me regarding the fact that there are various fora which to various degrees tackle issues of whether this practice is harmful from the point of way of competitiveness or competition between jurisdictions or not. We also see how these various fora work. We see that any assessment of harmful tax practices are based on various criteria which these fora look at. So we believe that it might be useful to win the framework of our work on the convention or on the future protocols. We should highlight the fact that we need to standardize an approach to assessing whether a practice is harmful from the point of view of taxes or not. And related to this, aware of the fact that we require a single set of criteria for any assessments which would be applicable to all countries, all states and all practices and all tax systems, we would propose a change to paragraph three of this article, to ensure that we enshrine this type of decision, namely that countries would be ready to elaborate effective measures and mechanisms to fight against harmful tax practices. We would have a single methodology, a single set of criteria, which would underpin this methodology and therefore a single universally recognized mechanism. Our concrete proposal for subparagraphs c and d in this article on harmful practices is one which we will forward to you in writing before 5 November.

Thank you.

Bangladesh Thank you, respected Chair. all distinguished guests.

Article eight, that is harmful tax practices, Bangladesh government has supported all three paragraphs.

But we have some comments about this.

Bangladesh thinks special tax opportunities is given to the taxpayers, who are conducting business some special jurisdiction that is EPZ export processes zone or SEZ social economic zones they avail tax free income there but we have some comments some recommendations about this that is one EPZ or social economic zones, incentives must remain available, but harmful profit shifting incentives must be controlled. We think, allow development link incentives require real economic activity. Especially we focus on paragraph two and our firm stand about this. incentives must support real investment, not profit shifting. No blanket ban on EPZ or SEZ or investment incentives. Thank you all.

Thank you, Bangladesh. Saudi Arabia, please.

Thank you, Chair.

We all recognise the importance of combating harmful tax practices and we do support the inclusion of a text in the convention. When it comes to the first paragraph, we are okay with it, as it seems broad and reflects an important aspect of this work. But when it comes to the second paragraph, I think the reference at the end which read, "and not merely profit-based," I think we are prejudging here the result of profit-based incentives. And it's not necessarily that profit-based incentives is, by definition, a harmful thing to do. Therefore, we suggest deleting that last sentence and alternatively I think we can also support the proposal made by India. And I think when we move to paragraph three, A, we are broadly okay with it, but when it comes to B, the introduction here of a minimum tax, I don't think this is something we can live with. And I think we should keep this as broad as possible. And I think also here we can support the Indian proposed language. Thank you.

Thank you, Saudi Arabia. Republic of Korea, please.

Thank you, Khalid. Good morning, colleagues. Korea would like to thank the Secretariat for preparing the revised draft reflecting members' inputs. Korea supports the view that addressing harmful tax practices is an important step toward ensuring fairness and transparency in the global tax system. Having said that, as this issue is already being addressed under the Forum on Harmful Tax Practices, We believe that discussions under this process should take into account the ongoing work there to align with that and avoid duplications just like as many other delegates have mentioned before. In this regard, Korea is looking forward to further discussions on this as mentioned by the co-lead. In detail, turning to the current text, We would like to comment about the paragraph three, sub paragraph B. With regard to paragraph three B, given that the term minimum taxation could directly affect the tax sovereignty of states, we suggest considering a more flexible expression such as effective taxation to better reflect the principle of respecting national tax sovereignty. Thank you, Chair.

Thank you, Korea. We have China, please.

Thank you, Chair. Good morning, colleagues. We acknowledge the necessity to combat harmful tax practices with collective efforts. So we support the languages in paragraph one, but already mentioned by other colleagues in the previous interventions, these languages are more like languages in the preamble. That's for paragraph one. For paragraph two, we support the changes compared with that of the September version draft. The current paragraph includes the concept of substance-based. Maybe we will come back later in written form for further refinement of this paragraph. For the time being, we are thinking that the language provided by India for paragraph two is workable. and can be taken into consideration for further refinement. And for paragraph three, as for the subparagraph A, as already illustrated in yesterday's discussions, it overlaps with some other articles and should be removed and consolidated into Article six or in a separate article. I will not repeat that. For subparagraph B, we support the suggestion by Singapore and Saudi Arabia to delete, which may include minimum taxes. At this stage, we are thinking that it is not necessary to specifically listing very specific measures in the framework convention. Relevant measures can be discussed and determined and agreed in the future protocol after very careful discussions. Thank you, Chair.

Thank you, Chair. Spain, please.

Good morning, everyone. Thank you very much, Chair. As this is my first time taking the floor, I'd like to thank the UN for preparing this session here in Nairobi, Kenya, a beautiful country, and the Spanish delegation is very happy to be here. Regarding this article on harmful tax practices, like other countries, we find that this is a very worrying topic. We are very much in favour of having this article, but again, like other countries have said, we are concerned by possible duplication. We said that this is the, that we will see the results of this when we go to Article 12 as well. So the discussion of this article is very much preliminary in that sense as it is linked, if I understand correctly, to the discussions that we will have under Article 12. More concretely, In each of the paragraphs, I have some comments. In paragraph one, I think that when we talk about international cooperation, this may already cover global and regional levels. So it might not be necessary to include that. On paragraph two, We might say something about the fact that these tax incentives are not going to be used only for tax purposes. And regarding paragraph 3a, here we see the greatest level of duplication as other countries have said. And when it comes to paragraph b, if possible, I would like to hear some explanations on what you think about minimum taxes. In the wording of this article, when it comes to the wording of this article, could you explain exactly what was meant by that? Thank you.

Thank you, Spain. On the explanation of minimum taxes, I believe it is Member States who raised it. So I expect that member states should be able to give a response to that as we go along. Nigeria, please.

Good morning, Chair and colleagues. And thanks to the Secretariat who has helped to provide this update to the draft. First of all, Nigeria aligns itself with the propositions extended by Zambia on behalf of the African group. And I make this other comments in our national capacity. I think the starting point for us is to appreciate everyone who had made contributions either to because I have seen that our contributions have been very positive. Uh with a view to ensuring that we have an article that is achieving intended purpose and is fit for purpose. Uh in this framework. Um without doubt colleagues, some colleagues have spoken about existing forum. Um actually it's not just a forum, we have fora, we have quite a number of frameworks that are already in existence. And just like the co-lead directed us to the TOR, we also want to remind delegates that the TOR of this committee already recognized those existing fora. and has also mandated that ah the developing the framework and also the necessary ehm ah protocols will take cognizance ehm of those and I believe that that discussion ah will come at the appropriate time so ehm perhaps we should all ehm look at how to make ehm the drafts ah before us ehm ehm appropriate or or or make them effective. Um as to the proposer from as to making reference to countries with harmful practices. Um within the language proposed to change to business activities benefiting from harmful tax purposes is very neutral and also appropriate. As to the point on to the question on minimum tax as used in this draft, our understanding is that this is not referring to any specific minimum tax either existing somewhere else or being proposed. But that intention is to ensure that business activities arising are liable or are subject to tax at a minimum. This is our understanding of this. Probably the language may have to be tricked to make it clearer in that respect. Chair, we'll stop here and we do hope that all the comments that have been made will go into providing an updated version which probably will capture the discussions we have had on the floor. Thank you, Chair.

Thank you, Nigeria. Japan, please.

Thank you, Chair, and thank you, Secretariat, for preparing the draft. I align with many countries that previously intervened. If the paragraph 3A's intention is to establish a new framework separate from existing ones, Japan takes a cautious stance.

We consider it more important to support more countries in participating in the existing framework.

In this regard, we align with Singapore that we will look forward to later discussions. And for sub-paragraph b, we are confused about the term minimum taxes. And as other countries have already mentioned, we would suggest removing this term.

We believe that it would be difficult to.

Reach an agreement on introducing any measures where the details of the measures have not been clarified.

Thank you.

Thank you, Japan. Germany, please.

Thank you, Mr. Collett. Good morning, everyone. Germany, as many others, recognizes the need to combat harmful tax practices. There should be a common understanding of what constitutes a tax incentive and under what circumstances such incentives might be considered harmful tax practices. Germany however cannot support measures that fall within the sovereign authority of states and require sufficient policy flexibility to reflect national constitutional frameworks. Next to that kind of general statement I would like to add our voice to previous interventions from inter alia Singapore, the UAE, UK, Switzerland, and Japan. Germany is also concerned that the interaction with existing frameworks is not duly taken into account yet. And I appreciate the recalling paragraph 22 of the terms of reference. I was about doing-- to do the same as was read out by you, Mr. Kohli, the consideration of the fora and existing frameworks is meant to be carried out throughout the work. To me, that does not mean later in the process and in particular it does not mean once only. And in Germany's view, the starting point of our current discussion in order to be efficient should be to take stock of what is already in place. Thank you.

Thank you, Germany. Brazil, please.

Thank you, Chair. I'd like to repeat the, to remind the same similar views that Nigeria had that somehow I can, we can perceive that in the room that there's a broad recognition that the topic is of relevant, it is of interest of countries. And somehow we are in the right direction and it's very likely that we can find and accommodate a different language. My first suggestion would be to change the order of the second sentence and the first sentence in the first paragraph. I think it would have a more, we could, that way we would not, it would not be necessary to delete or to remove the first sentence to the preamble. It would read something as follows, I can send it later. State parties agree to pursue international cooperation at global and regional levels that is necessary to address harmful tax practices that foreseeably undermine the ability of other countries to tax income fairly, particularly income derived by multinational enterprises that can shift assets and income across borders. So I would simply recognize, I would simply suggest changing the order of the second sentence, the first sentence. We might discuss whether it's necessary to have an additional element there that is the foreseeably foreseeability element there because spillover effects we might know to to different degrees whether they are causing or not. State policies might be causing or not spillover effects. In relation to the second and third paragraphs, it's It seemed to me that the Indian proposal, the proposal made by India was well received and we should further take it into consideration and discuss it. Those are my comments for the moment. Thank you.

Thank you, Brazil. Portugal, please.

Thank you, Mr. Kollitz. Let me start by underlining that this is in fact an important part of our work to deal with harmful tax practices. We believe that we have room to do it and we also pretty much agree with the message and substance there is present in paragraph one, even if we recognize that the language is somehow preambular and as such we can retain it for sure, but probably in another place. Systematically it makes sense. In relation to paragraph 2 and 3, the bulk of our issues with these articles are already being touched upon by other delegations and Let me just in this respect appreciate the enlightenment that has been brought to this meeting in relation to what minimum taxes could mean. But even so, we believe that both these paragraphs two and three are in fact too much prescriptive in this stage of the process, of our process. Due to that reason, we would pretty much appreciate in the following work to give consideration to some of the, or almost most of the proposals that are already put on the table, be it by the African group, be it by India, be it by United Kingdom. We heard some things that we see merit in exploring as to, in respect of these two paragraphs. Of course, there is for us another important issue, It has already been signalled during this morning and we will take and record the answer that you have given to the floor, that it is for us to deal with the relation of this article with the efforts that we already have in motion, be it in the forum on FHTP. And we appreciate the recollection of what is in the paragraph 22 of the terms of reference and we will be quite curious to see how can we reflect that content in this in relation also to this article eight. Thank you.

Thank you Portugal. Israel please.

Yes, thank you sir. Regarding paragraph one, we support the principle and the need for effective implementation. We have over the years we have done some adapted our domestic law with regard to international standards. So we do know that we've done that. Regarding paragraph two, We think we should delete the end of the paragraph. It's from linked to investment at the end. We agree broadly with the principle of the substance based, but specific operation criteria necessitate discussion and agreement to clear operative measures. Regarding paragraph It seems we see how it is a problem to comment when we have work in other fora that is already made. And before we need to deal with that before we address this here. the paragraph highlights the need to clarify the relationship with that work, this is how we think, but we suggest to delete a paragraph, a sub-paragraph a and b and maybe change the developing at the head of the paragraph 3 with exploring. We think this might be a good suggestion of the paragraph. Thank you.

Thank you, Israel. Austria, please.

Thank you, co-lead. for giving me the floor. I would like to align myself with the intervention made by Norway earlier, actually in its entirety. I think she truly put very well in words what I was about to say. I'd simply like to highlight a couple of items that I think are particularly important. I think regarding paragraph one, I agree with others who suggested some redrafting so that the paragraph reads more as a commitment. and we would like to explore the proposals especially put forward by Zambia on behalf of the Africa group as well as the Brazilian proposal right now. Regarding paragraph two and three, I think that they are already relatively prescriptive and should not be in the framework convention in that detail. In particular, paragraph two reads as if this was the only harmful tax practice we are trying to tackle with the framework convention, whereas I think I heard from the floor that we're not really want to preempt already what kind of practices we would like to address later on. And therefore, I think that the specific tools, also specific tools and measures would have to be set out in a protocol or a different instrument. by also taking into account what we already have implemented in other fora. Thank you very much.

Thank you. Hungary, please.

Thank you, Chair. In general, Hungary fully supports international efforts aimed at harmful tax practices. We recognise the importance of coordinated action in this field and value the exchange of best practices among countries. At the same time, we consider it essential to respect the sovereignty of each state. Therefore, from our perspective, the current draft of paragraph 2 appears unnecessarily prescriptive. Therefore, we don't see it desirable to introduce such detailed obligations within the framework convention. This topic is already being addressed in other international forums. In our view, it would be important to avoid unnecessary overlaps and ensure consistency with these ongoing processes. Rather than introducing new binding commitments here, it might be more useful to build on the existing effective instruments and approaches developed in those frameworks. Thank you.

Thank you Hungary. Sweden, please.

Thank you, Chair. I also actually wanted as Austria to echo the comments made by Norway earlier, but also the new ones by Austria. I think that Harmful tax practices has been in the heart of our government for very long, and we have suffered as a country being a rather high taxing country over the years from harmful tax practices. So we have always been supportive of work that has been done in other fora in this respect. But having said that, I also think that the starting point sort of has to be what we already have so that we will use the resources in a good way. And to gain that understanding, I think would be crucial to see in order not to duplicate, but you need also an understanding of of what you actually think is the problem with the existing processes. I think also there's been, so I think that should be the starting point, but there has also been some, I think, proposals from different delegates that I also find interesting to explore. So yeah, so I just wanted to say that yeah, supporting of this work, but also having to sort of bridge what we already have. Thank you so much.

Thank you, Sweden. Kenya, please.

Thank you, Chair. Call it secretariat, member states, Good morning. I would wish to start by asking for the colleague to accord me a second to welcome you to Kenya and indicate that it is a green city in the sun. and you are welcome to enjoy both the day and the night life. Thank you. I would start by indicating as to where we derive the impetus of having the discussion on harmful tax practices. And I think it has been mentioned by quite a few member states. One, it is found under 10E, that is terms of reference, and paragraph 22, which the colleague indicated earlier, in terms of, yes, there might be existing discussions on this particular issue. However, as far as the INC is concerned, a discussion has to go on. taking cognizant that they are other fora that are having this particular discussion. Allow me to align ourselves with this statement from African group that was read by Zambia. We do align with that particular position. I would wish to put it on a sounding board on specific issues that were actually mentioned in that particular statement. One is on the implementation and development of tools that we believe would be effective in effectuating the envisaged harmful tax practices. The second one we would be looking at is the question of reforming one, reforming existing tax regimes that do allow incentives or for that matter tax incentive regimes and having it in mind that we need when we are looking at the incentives, we gravitate towards substance based incentives. On the other issue would be looking at question of specific information in relation to ring fenced preferential regimes, regimes that do have specific information that is not accessible to the public. And that is why we believe that there exists a private rulings or rulings that are taxpayer specific in relation to this ring fence regime. So it is important that this information is exchanged. and exchanged effectively. Then on the question of the issue of minimum tax, I would wish also to align with the explanation that Nigeria commented on in terms of it comes in as an example. If you look at the drafting that we'll be submitting under the African group, you will realize that it is an including kind of, we are giving an, we are trying to expound on the kinds of measures that could be taken within it. Then the other issue is, I would look at it in a very open way that harmful tax practices in itself, it is a sovereign. practice. And as we are seated here, we are trying to cure harmful tax practices. So by putting forth statements that are trying to address harmful tax practices, is not a question of interfering with sovereignty, but trying to put forth a level playing field in terms of businesses. Then on the question of, and I think it had been mentioned initially as a reaction to that effect, where exists, for example, SEZs and EPZs, we believe that these ones are commonly initiated in relation to substance. So I believe they will be coached within the elements of substance base. Then the other bit, I would say in terms of whether there exists other forums that are actually dealing with this particular issue, yes, they do exist. But what we are trying to say is we also have quite a few members who do not, are not party to this for us and they would be interested to have this particular discussion within this particular forum. Thank you, I submit.

Thank you, Kenya. Belgium, please.

Thank you, Chair, and also for the work on this article again. We want to align ourselves with what has been said previously by Norway, Sweden, Germany, Japan, Singapore, Spain. We think it is important that we address this article also, or the way it is now set up. with the discussion under Article 12 because for us it's really important to have a common understanding on the interaction how you see this with what already exists and if already existing frameworks if that could be seen as already be part of what is what is an effective tool for instance we would also like to agree with the the proposal for Singapore to put in paragraph to adjust the developing into exploring more because for us it is important to first know how this will interfere with what already exists and I know there is the reference to the TOR but that is not concrete in how in practice like how practically you see the interplay between the two um and so I want to understand the potential and intended interplay with what already exists on harmful tax practices. This is a really important thing to combat and we've been doing it for many years. And also understanding, okay, there is mentioned there are a lot of members here who are not member of existing frameworks. as Japan said we would also like to see encouraged or what is the reason that they don't want to become a member of existing frameworks on this so that is for us it's relevant that we also have a clear view of what will be put in article 12 horizontally with here this discussion thank you.

Thank you Belgium we now have Ireland.

Thank you very much, Chair.

Ireland agrees with many of the comments raised by others, including specifically India, Switzerland, Norway, Belgium and others.

We fully support the need for a specific commitment in this space and are.

Supportive of the wording already contained in paragraph one, subject to the suggestions made by Austria and others. Just briefly on the issue of the interaction with other forums and the FHTP in particular, we thank the Chair for the references to the TOR regarding those matters.

We look forward to discussing it as soon as possible. But we share the view, the clarity on whether or not the consensus in this room.

Is to build on that work or not is really, really important in terms of how we approach this article.

On paragraph two, we agree with what is here requires further explanation and risks being overly prescriptive. As others have said, what may be deemed harmful can emerge and evolve over time and this text must be able to adapt to that. We think the language proposed by India in that space is interesting and could be explored further. On paragraph three, we also think that there's positive and negatives aspects to trying to list specific tools and perhaps further consideration here is warranted in terms of whether or not that's best left to protocols.

Thanks very much.

Thank you, Ireland. The Kingdom of the Netherlands, please.

Thank you, Chair. The Netherlands attaches great importance to addressing harmful tax practices. Like many others, we are therefore actively engaged in various fora that carry out work to tackle harmful tax practices, and we are committed to build on this important work.

We believe.

It is essential to continue identifying, also here, through the work of this Framework Convention, where we can improve and where we can make further progress on this. We would like to see recognition also of this, like others have said, like Belgium, Ireland and others, in the terms that are also included in the terms of reference, we would like to see this reflected in the Framework Convention itself. That being said, we are of the view that the current wording of Article 8 is in some parts formulated too specifically. This limits our ability to identify current gaps and address harmful tax practices where necessary while avoiding fragmentation in our efforts. With regard to paragraph one, we see that small and medium-sized enterprises as well as individuals can also engage in harmful tax practices. We therefore would suggest to keep the wording more open. We find it important that we maintain the flexibility to address these situations as well. Finally, several delegates suggested that paragraph one may be considered preamble wording wherever it lands, we would suggest to keep this part more open and remove the reference to business income. Thank you, Chair.

Thank you, Netherlands. France, please.

Thank you, Mr. Chair. Good morning, colleagues. I'm going to speak in French.

France is extremely favourable to a commitment in favour of harmful tax practices, which is a key element to effectively strengthen international tax cooperation. Exercise and consideration on such a commitment is something that is useful, it should be continued. should be fine-tuned and the concepts which are used will have to be defined in a very precise way to ensure that states have a common understanding of what harmful tax practices are. The practical implementation aspect of this commitment will be very important because as this was underscored by many speakers it is important to ensure that what we do will be able to adapt to changing trends which always exist in this field. Finally, it will be important to ensure, in keeping with the terms of reference, the complementarity with existing tools, which from our point of view are an essential element to enable us to hear within the framework of this convention to improve things. rather than just to create a duplicate structure or to recreate something from scratch. No, we need to make practice in our fight against harmful tax practices, perhaps by expanding the scope as compared to what already exists today. Thank you.

Thank you, Frans. Rwanda, please.

Thank you very much, Chair. Rwanda would like to recognize the importance of having this provision in the convention to deal effectively with harmful tax practices. And we very much align with the submission made by our Zambian colleague on behalf of the Africa group. And therefore, we would say we also take not of the existing framework like some countries mentioned, which are trying to deal with this matter regarding harmful tax practices. However, we want to highlight the fact that some countries are not member of these forums. And we also acknowledge the fact that these frameworks are not effectively very much helpful for some of the countries. and we want to align with Nigeria that if there's need to discuss the complementarity between this convention provisions with the existing framework that can be done and we'll look into that further but we also want to say that specifics regarding the suggested draft would be looked at later as we do our submission this coming December just to make sure that we stay high level not to go into specific details as we want to redesign effective tools to combat harmful tax practices thank you chair.

Thank you Rwanda um Estonia please.

Thank you, Chair. I would like to align myself with the interventions made with Ireland and Belgium and all the other countries that Belgium listed. I will keep my comments general with this article as well. We have done the work on harmful tax practices in international fora for decades now, and I think all the countries involved on one side or the other side have experienced that this is an extremely sensitive subject that must be handled very carefully in order to avoid creating bitter feelings. Therefore, we would be grateful also if we could begin with identifying the gaps in the existing tools and the shortcomings of the existing fora as well. Reacting to what Randa said that not all the countries in this room are part of the existing forum, I thought that if we are comparing the Global Forum on Transparency, for example, where the countries need to make considerable investments in order to implement the tools that are developed there, then the work regarding harmful tax practices is perhaps easier to use for the country or the results of the work done in this fora is easier to use for other countries outside the fora as well, because what we have been doing is that we've been identifying the harmful tax practices and then modified our domestic laws to provide an appropriate response to such practices by the identified countries. So perhaps it's a bit easier work here in this field to use what we already have. And again, I would like to stress that this is an extremely sensitive subject and we have to handle it with care because it touches very directly upon the sovereignty of all countries. Thank you.

Thank you, Estonia. Sierra Leone, please.

I would like to align with the statements made by Zambia on behalf of the African group. Of course, Sierra Leone sees this particular article as enormously relevant to the issues here. Harmful tax practices represent a systemic threat to Sierra Leone's fiscal sovereignty and revenue stability. Harmful tax practices deprive Sri Lankans of a critical forms for development, it distorts the investment climate and weaken public trust and the tax system. So by pursuing reforms that increase transparency, ensures substance and incentives and strengthen international cooperation, Sri Lanka believe that a tax base will be safeguarded and align with global standard and enhance domestic tax revenue mobilizations. So I would not want to go into the details of the article, but I also want to reiterate and emphasize this. We strongly align with the wording submitted by Zambia on behalf of the African group. Thank you, Chair.

Thank you, Sir Leon. Bahamas.

Thank you very much and thank you for the opportunity to speak. You know, certainly the Bahamas recognizes the importance of Article 8, harmful tax practices, and also recognizes its placement in the terms of reference. We do have a couple of comments on this we would like to put forward. We believe it's very important to understand how harmful tax practices are going to be defined and who are going to be the applicable parties who are going to designate what a harmful tax practice is. We, although we've heard many colleagues speak about other forum and the forum on harmful tax practices and how we might want to take into consideration the work done there, the Bahamas is of the view that we would like to see how this convention is going to differentiate from what has happened and what is ongoing at the forum for harmful tax practices. We are of the view that the approach taken in defining what a harmful tax practice is at the OECD and the forum is discriminatory and it's inequitable, especially when it comes down to low or no corporate income tax jurisdictions like the Bahamas. Having said that, we would like to see again how this clause would differentiate from the inequitable treatment that we deem to exist in this realm. And certainly having said that, it would seem to indicate that paragraph 3b when speaking about a appropriate measure would be a minimum, uh, tax to be imposed would seem to be adopting the position of, uh, the FTHP that a low or nominal corporate tax jurisdiction by definition would be a harmful tax practices, practice, uh, and we would object to the inclusion, uh, of paragraph 3B for that purpose. Again, we would like to see more refinement and see more objectivity on how this clause is to be treated and who is to make the decisions and the criteria in which those decisions are made to have the comfort level to advance this article in the convention. Thank you very much.

Thank you, Bahamas. We want to take a 10-minute break before we continue. Thank you.

Hello everyone, should we start now? So now we're going to resume the floor again on the same topic, harmful tax practices.

So please everyone have a seat.

Daniel, over to you.

Good afternoon, welcome back from the break. We'll continue with our discussions. We have Nigeria, please.

Thank you very much again, Chair and colleagues, for giving me the floor again. Chair, there is a saying in my part of Africa that if a person doesn't know where he's going, at least he will know where he's coming from. And I would like to actually draw inspiration from the greatest musician that ever roamed this planet by the name Bob Marley. And he wrote in the song titled Exodus, he said, we know where we are going, We also know where we are coming from. Much has been said about existing forum, existing tools, and there are suggestions, in my understanding, why are we going through this? Why don't we just adopt those ones? I think the first point is, if I take again from the work of the Bible which says that if the Old Testament were good there will have been no need for the new if the existing Forum or fora had been adequate accommodating inclusive and practicable and acceptable by all chair who will not be here today. And for the whole world to mandate this committee to do this work is an acknowledgement that those existing fora, standards, tools are either inadequate or unacceptable to all. And it is my view therefore that the work of this committee is to produce a framework that works for all. Developed, developing, undeveloped. north-south, east, west. And I think our job here as members, as delegates, is to do what we have been mandated to do. the less effort, the less emphasis we place on existing protocols, existing forum, existing standard, the quicker we will do our job. And finally chair there are many countries, many jurisdictions who are not members of existing forum. I understand the global forum has about 172 jurisdictions, but not 172 countries. So there's still significant number of countries and other jurisdictions who are not member of this forum. And some of them will never be members of this forum. And I think the earlier we accept that, and then we move on with the job that we have entrusted with, the better for all of us. Thank you, Chair.

Thank you, Nigeria. India, please.

Thank you, Chair. The concern being raised by many of the member states relating to the treatment of the existing mechanisms, India believes that it can appropriately deal with these concerns under Article 12 of the Convention. and may not be reiterated in each of the individual articles. That's a limited point. Thank you.

Thank you, India. Mauritius.

Thank you, Chair, and very good morning to everybody. Yes, let me start to say that, you know, combating harmful tax practices is indeed, as highlighted by a number of speakers before me, an important, you know, objective that we need to really work on. Let me also mention that Mauritius is in alignment with the proposals made by the Africa Group. And that said, as a country, we've got a few things that we would like to add. First, we would like to highlight that we have been following up on the work done by the, by other forum, on this very subject. And in so doing, we have had to review our own tax regimes, few of our tax regimes, so that they are aligned with rules that exist currently. Rules that makes regime not harmful, including providing incentives on the basis that substance conditions are met and that there is no ring fencing. Yes, maybe existing rules needs to be reconsidered, but I think it could be a starting point. So in furthering our work on this matter, it would be important for us to clearly define the criteria as to what makes a regime harmful or not so that countries are given time to reconsider, reexamine their practices and see that they are aligned with rules that we are going to develop. Another aspect that I think we need to also be mindful of, how once rules are established, how are we going to apply these rules to jurisdictions which we call no tax jurisdictions. So I think this is also an important work that we'll have to, you know, consider in furthering the discussions and the work on this important matter of harmful tax practices. Thank you.

Thank you, Mauritius. Uganda, please.

Thank you very much, Chairperson. Chair, Uganda too recognizes the importance of including this article in the convention. And that said, aligns itself with the position presented by Zambia on behalf of the African group, as well as the submissions from Nigeria and Rwanda. Specifically with regard to the existing frameworks, I think the solution would be to deal with the details, the details of reconciling those frameworks with what we are doing here. within subsequent protocols, as opposed to trying to capture all that detail here. I think that would be the best way forward. Thank you, Chair.

Thank you, Uganda. We now have Peru. Mic to Peru, please.

Thank you, Chair.

The mic is to Peru, please. Peru before Tanzania.

Thank you, Chair, and apologies, Tanzania, for going before you. For Peru, combating harmful tax practices is a major priority, and we see it as a key component for this convention. especially because it strongly hampers our capacity for resource mobilization and so we see with great interest the development of this area of work. We have a couple of very short and precise comments and questions, more questions than comments. The first comment is something that we've already made in previous interventions related to other articles which is that the para one would probably more likely be better located in a preambular section. The other question is on para 2, it seems to be a bit of a self or automatically applicable disposition which we would like to understand how this would work in the context of a framework convention and then how and where it would be applied or how would this operate. And then the third question is, and I think it's been raised by many of the delegations in this room already, is how do we see these interactions with, uh, with already existing work in other fora. Thank you, Chair.

Thank you, Peru. Um, actually, your second question is what we are discussing, how it will fit in. So as members contribute, I'm sure we'll get that answered. Um, right now, the United Republic of Tanzania, please.

Okay, thank you, Chair. Chair, the United Republic of Tanzania aligns itself with interventions made by Zambia on behalf of the African group. We take note of the progress achieved in existing fora. However, these remain limited in both representation and development relevance. Decisions on what constitutes a harmful practice continue to be made in settings where developing countries, including those in Africa, have little or no decision-making power. For us, Chair, the central question is who defines harm by what criteria and for whose benefit? Existing processes have not recognized the developing countries legitimately use targeted tax incentives to promote industrialization, economic diversification and job creation. Accordingly, Tanzania fully supports the African Group's proposal and will provide additional comments by December to help ensure that the text reflects a more balanced and that safeguards the right of developing countries to design fiscal measures that advance sustainable development. Thank you, Chair.

Thank you, Tanzania. We have the Islamic Republic of Iran.

Thank you, Mr. Chair. Good afternoon, colleagues. Just general comments and some suggestions about the wording of the CLUTs. We support the objective of Article 8 as part of global efforts to promote fairness and transparency in international taxation. However, we emphasize the importance of providing a clear and consistent definition of harmful tax practices to prevent ambiguity and differing interpretations. We stress that related commitments must fully respect national sovereignty, domestic fiscal priorities, and the economic differences among countries. Discussion on minimum taxation should also reflect each state's unique capacity and level of development. In paragraph two, we support other delegations coming to remove and not merely profit based and align with the approach proposed by India, which emphasize a cooperative framework based on shared principles rather than perspective policy tools. However, Iran underlined that legitimate tax competition must not undermine the transparency and the fair allocation of taxing rights. Finally, we propose replacing the wording business activities originating from jurisdiction with harmful tax practices with business activities arising from harmful tax practices in paragraph 3. Thank you.

Thank you. And Jamaica, please.

Thank you, Chair. Chair, I'm just reflecting. Well, first, let me say that we welcome this article in the framework convention. and we are in agreement with some of the proposed changes, particularly by India and others. But Chair, my reflection is also on the intervention that was just made by Nigeria. And I don't want to prolong this discussion, but I have to say that We are at a loss as to how paragraph 22 in the terms of reference is to be interpreted. Throughout this discussion on the framework convention, the words duplicative, other fora and so on has come up. We are mindful of the fact that not everybody is a member of the Global Forum or the inclusive framework. And we are quite aware that where there is no membership there, then you would not be necessarily implementing the work that has been done there. But when you have a sentence that says throughout its work, The intergovernmental negotiating committee should take into consideration the work of other relevant forums, potential synergies, existing tools, strengths, expertise, complementarities available. I am not quite sure how to process that anymore. Because it appears that if any mention is made of work done in other fora, and it is said that this is duplicative, maybe we should focus on the gaps, what has not, the weaknesses and so on, then it is seen as there seems to be an issue with that. And so for our part, Chair, we are just not able to process what paragraph 22 means in the entire discussion of the framework convention.

All right, thank you, Jamaica. We'll get there eventually. Germany, please.

Thank you, Mr. Kaulitz, and thank you for giving me the floor again on that topic. I would like to react to the previous intervention by the distinguished delegate, of Nigeria. I'm used to Marlene being right about what she says, and she did exactly that just a couple of seconds ago. And so each of the arguments that were made previously by the Nigerian delegate can be turned around in favor of those member states who have been advocating for for the consideration of existing frameworks. However, our exercise, it shouldn't be about all or nothing. It is not about the choice between leaving everything as it is or inventing the wheel from scratch. And I have not heard anyone saying that what is existent is sufficient. So indeed, I agree if that were the case, we wouldn't be here. Yes, it is true there are countries, and it's not few countries, for whom the existing frameworks do not work, who are not participating in it. It is, however, true that there is a whole bunch of countries for whom the frameworks do work, apparently. And I think it is both fair and necessary in order to truly develop something that eventually works for all of us to also acknowledge that. And as Marlene was just saying, not to be totally ignorant about the desire to have a reflection of what is already there. Thank you.

Thank you, Germany. We will now move to the stakeholders. African Union, please.

Thank you, Chair, for giving us the floor. We want to identify with the initial statement submitted by the delegate of Zambia on behalf of the African group. We want to also completely identify with the statement made by Nigeria. with respect to the discussion that members have put forward. And we want to acknowledge first and foremost that harmful tax practice is like an ill wind that blows no one any good. It is one of those pillars of international tax cooperation, which we as a people take very seriously. And in doing that, we want to respond to issues raised by members about existing platforms. Going to the terms of reference, it is very clear that this article is a must have in the convention. It is counterproductive for us to spend our time trying to use our discussion to amend a decision that has already been made by UN General Assembly. And I agree with Chamney that the existing framework may work for some members. Um but I definitely I am very certain that it is not working for a lot of our members. About 27 of our members belong to the forum on half of tax practices. Um and the most of our members in the time past have been blacklisted, grey listed, or gas lighted. Based on issues that come from those platforms. We feel also that the underlying mechanism for decision making in those platform is not is not inclusive of our members. And we know for sure that there is a mandate to this committee to build a platform that is more inclusive and more representative of interest of all members. And that is why we are here. In this respect, we will support that proposal made by the African group. And we are also interested in the element of proposal made by India. And we employ members to look towards solution as against grandstanding, if I have to use that word. I will also say that in the grand scheme of things, we will, this is a high level commitment after all. So if we have committed in this level and members need to go home and rework existing framework to meet up with the standard that will be set by all sovereigns who will be members of the conference of parties in this respect, that should be able to suffice. But if the sovereigns in conference of parties decide to put up a new standard or build a new framework from ground up, I think it's something worth considering. We thank you, Chair.

Thank you. I think, okay, Jamaica, please.

Yes, Chair. Maybe I should probably clarify what I was saying before. I'm trying to see how I could clarify it. But all right, so let me say this. What we have been seeing in in throughout this exercise is some repetition of what already exists. I think everybody is of the view that the current system is not working for everyone. I do not believe that there is any disagreement there. what we are see what let me just say what Jamaica is seeking guidance on is where we see language that is similar from other forum or fora is that considered to be taking into consideration the work done in other fora Is it okay to use similar wording? Is it okay to use similar construct? That is a question that I'm asking and what I'm seeking guidance on because it is not clear to me what how we are to interpret that paragraph 22. Should we just simply not make any mention of the work that has been done before? Are we trying to identify where the work that has been in existence has fallen short? I think we are all aware that these some of these that the current system which has been around for a hundred years when most of us were not sovereign states have not worked. But that does not necessarily mean that we could not extract from that work what works and improve on the work. I thought that that is a process that we were engaged in. And so my submission at this point, Chair, is that we should, having identified the shortfalls, we should focus our energies on that, but at the same time be able to interpret section 22 in the way that it is intended to be interpreted, because I don't know how it is intended to be interpreted. Interpreted.

OK, right. Thank you, Jamaica. I think I made a statement a bit earlier on that. What we are reflecting in the text is what came up during the intercessional sessions. wording we are using are wording that member states used. So I remember a few minutes ago when somebody asked for the meaning of minimum tax, I indicated that as member states who raised the issue, so they should have wants to define it, not the chair, managers to coordinate or the secretariat. So in the same way, all the words, there are words we have come up with as a work stream, and that's what we are discussing. That's the first one. Now, I really don't want to go into 22 because we had, I don't know how many months of discussing this when we're working on it here. And what is taken into consideration? I mean, my lawyer friends have a very nice way of saying that when a word is modified, pick the ordinary dictionary meaning. So I believe that is what we need to do in looking at some of these things. What does the word say? What is the meaning on the face of it without adding anything to it? And so that's as far as I'll go in this. But as for the wording that we're using, it's wording that member states have come up with. And so whether it's we borrowed it from other forum or it's created, that one really is members who have come up with what they want to say. Thank you. We'll move on to TJN please, TJN. Or do I have a country? No. Brazil, please, sorry.

Thank you, Chair. No, I just pressed the button. So I would like just to present two brief comments. I totally agree with you that going back to the discussion on complementarity or not, that's not the proper moment. And to remind us that we are fully aware that we will have to, and we definitely will take into consideration other forums work, standards and so it might be the case that in minor details we might differ, make them more stringent, stronger or whatever, but probably that kind of friction will be, will occur in very minor cases and details. That's what I would expect now, but that's a long way ahead, we should not delve into that now and by no means we will ignore other forums work. But I would like to consider the argument that not so many countries participated in other forums. And there is an indirect benefit that I can imagine here. So by expanding the scope, the subjective scope, and allowing more countries to participate in those discussions on harmful tax practices, probably many countries will benefit by reviewing their own practices and possibly figuring out that they could change some tax incentives or regimes that they might have and allowing them to justify changing those details in the legislation probably will help them to get their more political momentum, political force to change what sometimes might not occur in the only looking at the domestic political environment. So probably there are other indirect benefits here that will help us to promote domestic resource mobilization by reviewing tax practices of some countries and making them more cognizant on the details that might not work or might be inefficient or redundant in specific regimes or details of the domestic tax policy. Thank you.

Thank you, Ibrahzo. Can we have TJNA please?

Thank you, Chair. I speak on behalf of the Tax Justice Network Africa and the African Civil Society Working Group on the UN Tax Convention. Distinguished delegates, civil society maintains a unified and clear stance on Article 8. Firstly, that the scope of Article 8.1 should be expanded to include all types of actors capable of engaging in international tax abuse, including, but not limited to, Governments that, under the influence of neoliberal policy prescriptions, provide excessively generous tax breaks to multinational enterprises to attract foreign direct investments. Secondly, jurisdictions that promote financial secrecy. Thirdly, banks and financial intermediaries allowing wealthy individuals to move money across borders and employing weak and anti-money laundering controls. and professional enablers, including law and accounting firms. The funds lost through harmful tax practices not only erode our tax bases, but also deplete resources necessary for public provisioning, such as investments in gender responsive public services and care systems. Furthermore, although Article 8.2 addresses tax incentives, It omits the issue of public transparency, therefore its scope should be expanded to encompass all types of tax incentives and incorporate measures that ensure public transparency. For far too long, due to the pressure of international financial institutions, global south countries have been granting low corporate tax rates and increasingly generous tax incentives to attract foreign direct investments, leading to a race to the bottom and depriving our government of the resources necessary for sustainable development and the realization of rights of marginalized groups, including women's rights. Concerning Article 8.3a, although the language hints at public country-by-country reporting, it remains ambiguous. As previously advised by the civil society under Article 6, a specific article should be added to explicitly mandate public country-by-country reporting. Multinational corporations that rely on tax avoidance schemes have little incentive to publish disaggregated country by country data since transparency would reveal distortions in their reporting and allow stakeholders to challenge the fairness of their tax practices, hence the need for mandatory country by country reporting. This would help tax authorities detect and challenge profit shifting that undermines fiscal capacity. Additionally, It establishes accountability frameworks that support feminist economic analysis and advocacy and creates opportunities for CSOs, especially women's rights groups, to evaluate whether corporations operating domestically contribute fairly to public finances in relation to their economic activity. Furthermore, While Article 8.3b presents measures against harmful tax practices, including the option of minimum taxes on multinational enterprises, the provision remains unclear. First and foremost, while the global minimum tax standards can be a tool for advancing gender equality by increasing public revenue, it must be substantive enough to be transformative. The current 15% rate is almost meaningless, too close to tax haven rates, and fails to generate substantial revenue for gender transformative public provisioning. An effective minimum tax rate ought to be established together with the implementation of unitary taxation and formulary apportionment, as previously suggested by civil society under Article 4. In conclusion, the convention ought to incorporate a comprehensive definition of harmful tax practices, emphasizing the extraterritorial responsibilities and obligations of states, particularly when their policies and practices may impact the effectiveness and fairness of tax systems in other jurisdictions, especially because the current global tax rules favor global north countries to the detriment of the global south. Moreover, the commitment of States to eliminate harmful tax practices should not be confined to those conducted by multinational enterprises, and a transparent process for the identification of such practices must be established by the Conference of Parties. Thank you.

Thank you. ATAF, please.

Thank you, Chair and delegates. Thank you for the opportunity for making this intervention. First and foremost, I think it's common knowledge that tax incentives and basically harmful tax practices present significant challenges to many of our countries because they undermine capacities of countries to collect the fair taxes from their jurisdictions. while also incentivizing the base erosion and profit shifting mechanism of some taxpayers. So at least it gives us comfort that this is not new conversation. It's something well known to all of us and of interest. I would like to therefore align our submission to the comments earlier made by the Africa group and the subsequent comments made by Rwanda as well as Nigeria. Particularly on the issue of taking into account existing measures. We hear those comments and I think as articulated by our colleagues, it is true those other measures as they exist, they've got challenges either in relation to their scope, their design and particularly the inclusivity. and fairness particularly on how they are administered and it's those kind of issues that we are hopeful that including this article then is an opportunity for us to strengthen and of course provide solutions that are more inclusive to all to address this fundamental issue. Onto some specific concerns on the text that we presented, starting with paragraph 2, I think as we articulated, we get the comments about some of the principles articulated there, where we would propose that we ensure that the type of incentives that parties commit to, they must be substance-based incentives. And of course, we've taken into account comments from others in terms of excluding the last line in that provision, that's paragraph two, that talks about profit-based incentives. And so if we just keep it that the incentives should be substance-based, it's an important principle to reflect in this article. There was also concern about paragraph 3.2, particularly on exchange of information. We just heard now on the challenge of having country by country reporting requirements in this paragraph, and that's a fair point we've taken into account that makes sense, and so we would agree in ensuring that this article does not have those principles that could be reflected in other articles on exchange of information. but also strongly recommend we need a certain level of transparency associated with a tax incentive, at least minimum exchange of information or sharing of information about those, particularly where that information is not in the public domain is important. On the last paragraph, 3b, I think has been articulated by a couple of our colleagues. the idea of having minimum taxation here is only intended to be an example. It is fairly acknowledged that countries can have different measures to address these issues, including reforming the existing incentives. And so it is fair to include that as an example, they are also noting that there are also members, states already here, either that have included, introduced these measures or are considering those measures. I submit.

Thank you, Ato. AIDC, please.

Thank you, Chair. I'm Yako speaking on behalf of the Alternative Information and Development Center from South Africa, also a member of the African Civil Society Working Group on the UN Tax Convention. As recognized in Article 8, transnational actors like MNEs are highly mobile, taking advantage of egregious tax and secrecy benefits offered by some jurisdictions through shifting their profits to these locations. while placing pressure on other states to compete in the tax race to the bottom, undermining their own tax base. Distinguished delegates, we want to focus our intervention on Article 8 through how this relates to the extractive sector in particular. We believe that the extractive sector deserves special consideration with regards to this article, as well as other articles such as Article 7 and 9, because of its unique impacts. Unlike most other economic activities, extractive industries lead to the permanent loss of countries' non-renewable resources, unavoidable environmental degradation, and tend to crowd out other economic sectors, resulting in what's known as the resource curse coming from the international division of labor. These impacts of harmful tax practices in the extractive sector also go beyond just the erosion of the tax base. they enable shifting of profits from other jurisdictions. When that happens, it reduces the capital base for productive reinvestment, local development, wages, environmental rehabilitation. When they, uh, these harmful tax practices take the form of excessive or unjustified tax incentives, they can subsidize incredibly polluting activities while entrenching reliance on raw mineral exports. So in summary you cannot discuss harmful tax practices in our view in Africa without speaking to the issue of the extractive sector. So to this end we want to make just three quick points supporting the proposal put forward by the Africa group to add a specific conven- commitment in the convention relating to extractive industries. Uh, so the first point is that, uh, we support, uh, the, um, point made by TJNA that Article 8.2 addresses tax incentives but this needs to be strengthened with language reflecting a commitment towards transparency. The second point is that in recognition of the climate emergency currently discussed at COP30, we also call for this article to align with commitments to reduce emissions by including a commitment to refrain from providing tax incentives for investments in fossil fuels and the mining of raw minerals for export guided by the principles of common but differentiated responsibilities and respective capabilities. To avoid placing the burden on developing countries, this would need to be combined with redistributive measures such as a global surtax on polluting industries, connecting to the longstanding discussions around climate reparations in line with the polluter pays principle. Third point is while recognizing the desire to avoid overloading the convention with sectoral considerations, we believe that the extractive sector does deserve special consideration and should constitute a separate article in the convention text. This would allow for much more nuanced consideration of important issues raised in Article 7, 8, and 9. This commitment should also include a reference to enabling diversification and the reduction of raw mineral exports in line with climate commitments. The last point is that 8.3 introduces the possibility of a minimum level of taxation for business activities originating from jurisdictions with harmful tax practices. In our view, a more effective solution should also address the ability of MNEs to take advantage of these practices. In line with the terms of reference, we call for a separate, specific article on equitable taxation of multinational enterprises. introducing a transition towards unitary taxation with formally apportionment supplemented by a minimum effective corporate tax rate. This should be seen as a long-term solution to this issue, putting an end to aggressive tax planning which may be arguably legal but certainly immoral. Thank you.

Thank you, AIDC. Considering the time we have left before 1:00, it might not be possible for the next speaker to finish. And so we want to stop here and we'll come back and continue after lunch. So I hand over to the chair. Thank you everyone.

So now we will go for the lunch break and we will convene here again at three o'clock. to continue the discussion on article eight.

Thank you.