Civil society leader calls for unitary taxation and public country-by-country reporting as UN talks shift from principles to binding legal text
NEW YORK — As negotiations for the United Nations Framework Convention on International Tax Cooperation begin today in New York, former Malaysian Member of Parliament and civil society leader Charles Santiago has warned that the current draft risks falling short of the UN General Assembly’s mandate for equitable taxation of multinational enterprises and fair allocation of taxing rights across countries.
Running from August 3 to 13, 2026, this fifth negotiating session marks a major turning point in the effort to establish a fair global tax framework by 2027: shifting the intergovernmental process from talking points to hard law as delegates begin drafting the treaty’s binding legal text.
Santiago is currently on the ground at the UN Headquarters in New York as part of the civil society delegation actively engaging the intergovernmental process. He represents Monitoring Sustainability of Globalisation (MSN) and the Asian Peoples’ Movement on Debt and Development (APMDD) under the umbrella alliance Tax and Fiscal Justice Asia (TAFJA).
Underscoring the deep connection between global tax reform and domestic economic justice, Santiago urged negotiating governments to replace vague commitments like “explore” or “pursue” cooperation with enforceable obligations capable of fundamentally changing how multinational corporations are taxed.
“We need to stop treating multinational corporation as separate entities for tax purposes. By taxing them as single global companies, we ensure profits are taxed where actual work and business happen, while finally ending the double subsidies given to the Big Tech data centres,” Santiago said.
He added: “We need full transparency so citizens and lawmakers can see exactly what these corporations pay in taxes and verify if the incentives they receive actually benefit the public.”
Addressing the surge of data centre investments across Malaysia, Santiago highlighted the disconnect between physical presence and global profit allocation under the present international tax system.
“Data centres have a clear physical presence in Malaysia. They use Malaysian land, electricity, water systems, and public infrastructure. But the wider profits from cloud computing, digital advertising, artificial intelligence, and intellectual property remain distributed across offshore entities,” said Santiago.
“Malaysia should not be subsidising Big Tech twice — first through generous tax incentives, and then again by asking the public to pay for the water and system infrastructure these companies require. Data centre operators must bear the cost of the additional infrastructure they need.”
Santiago emphasised that while foreign investment supports national development, tax incentives must not become a race to the bottom where governments surrender their tax bases to some of the world’s most profitable corporations. Any tax incentive, he argued, must be transparent, time-bound, and strictly tied to measurable public benefits, such as actual taxes paid, decent employment, local procurement, and responsible energy and water usage.
To ensure the UN Tax Convention delivers a durable, future-proof framework capable of adapting to modern digital business models, Santiago said the final agreement must establish an explicit Article on equitable taxation of multinational enterprises to secure an operative, legally binding commitment for the fair allocation of taxing rights to developing and source countries. Core to this shift is replacing the current system with unitary taxation and formulary apportionment, which taxes multinational groups as unified entities and divides global profits based on tangible real-world indicators such as local sales, workforce size, and physical assets. Finally, this framework must be anchored by mandatory public country-by-country reporting, creating an accessible global transparency mechanism that requires corporations to disclose their profits, assets, and actual taxes paid in every jurisdiction where they operate.
“Confidential reporting between tax authorities is simply not enough. Without public information, citizens, parliamentarians, and workers cannot assess whether corporations receiving extensive state incentives are delivering the benefits they promised,” Santiago concluded. “We must not settle for a Convention that preserves an inequitable system while changing only the language around it.”