Advocates for the UN-led tax convention argue that the current global tax system is fundamentally broken, favoring multinational corporations at the expense of public services. By requiring companies to pay taxes where they actually create profit—in the shops, offices, and factories where their employees work—governments can reclaim billions in lost revenue. This approach, known as unitary taxation, is seen as a necessary correction to a system that has allowed firms to extract wealth from countries while booking profits in 'no-where' zones. For many nations, this is not just about revenue; it is about restoring the principle that economic activity should be taxed where it is physically generated.
Supporters emphasize that this transition does not require raising corporate tax rates. Instead, it simply closes the loopholes that have fueled profit shifting for decades. The scale of the potential gain is transformative: it could provide the UK with billions for social care and allow countries in the Global South to pay off significant international debts. By moving the decision-making process to the United Nations, the international community is attempting to create a more democratic and transparent framework that reflects the needs of all countries, rather than just a small club of wealthy nations and tax havens.
Furthermore, proponents argue that the existing OECD-led system has failed to keep pace with the digital economy. While the OECD focused on adding guardrails to an obsolete model, the UN process aims to modernize the very foundation of global taxation. For those who believe that public services are being unfairly starved of resources, this proposal offers a practical and fair solution. It ensures that the largest, most profitable companies contribute their fair share to the societies that support their operations, ultimately fostering greater economic stability and fairness on a global scale.