Asian civil society urges negotiators to reject corporate tax competition and back bold source-based rules
NEW YORK – On the final day of the negotiations for the 5th session of the United Nations Framework Convention on International Tax Cooperation, civil society groups across Asia issued an urgent call to Asian governments: end self-defeating tax competition, reject carve-outs and excessive treaty optionality, and align with the Global South to reclaim the fiscal resources required to tackle compounding economic and climate crises.
This key message comes directly from Asian civil society groups on the ground in New York actively engaging the negotiation process, including the Asian Peoples’ Movement on Debt and Development (APMDD) and Third World Network (TWN). They warn that across Asia, nations are grappling with a punishing triple crisis: soaring debt burdens, severe climate disasters, and persistent oil and gas price shocks. Despite hosting some of the world’s fastest-growing economies, the region remains trapped in a corporate tax “race to the bottom” that starves public coffers of vital resources. To build fiscal resilience, fund a just energy transition, and protect vulnerable communities from climate collapse, APMDD, TWN, and partner organizations stress that Asian nations must move past tax concessions and join forces with negotiating blocs like the Africa Group to reshape global tax rules.
Data from a groundbreaking research demonstrates that replacing outdated rules with unitary taxation—which taxes multinational profits where genuine economic activity and employment occur—would deliver a multi-billion-dollar financial windfall. By ensuring corporate profits are taxed at source, Asian nations can generate the public capital needed to finance sustainable development and break free from predatory foreign debt cycles.
Large consumer and labor bases position Asian nations as primary beneficiaries. India leads the region with an estimated annual corporate tax revenue surge of $43.24 billion (a 194% rise). Climate-vulnerable and debt-stressed developing economies stand to see massive proportional gains, with Bangladesh projected to gain $2.60 billion (+697%), the Philippines $5.79 billion (+341%), Pakistan $1.67 billion (+179%), Vietnam $5.01 billion (+158%), and Indonesia $9.55 billion (+106%). Thailand is projected to see a substantial increase of $2.09 billion (+43%) while Malaysia is estimated to gain $479 million, representing a 7% increase over the tax multinationals currently pay there.
The next round of negotiations will take place in November in Nairobi, Kenya, continuing through 2027.
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Charles Santiago, APMDD Regional Committee Member and Director, Monitoring Sustainability of Globalisation:
“Unitary taxation is fundamental because it treats multinational corporations as single entities and taxes profits where real workers, consumers, and operations exist, ending the accounting games that drain wealth from the Global South. We are alarmed by OECD-aligned proposals pushing ‘optionality’. It is a fatal loophole that allows rich nations to opt out of key rules and dismantle treaty integrity.”
“The historic opportunity before us at the UN will be realized if the Group of 77 and China stand united. For decades, developing nations have endured unfair tax rules that drain revenues and fuel debt. We need a binding UN Tax Convention that secures fair source-based taxing rights and rejects treaty optionality. Asian, African, and Latin American governments must act as one to secure the funding needed for climate action, public services, and economic justice.”
Chee Yoke Ling, Executive Director, Third World Network (TWN):
“The draft convention is still lacking in ambition in many parts, and serious concerns remain, chief among them the push for treaty optionality, which is a Trojan horse designed to preserve unfair advantages for tax havens and headquarters hubs. Replacing arm’s-length accounting with unitary taxation and formulary apportionment is the only path to genuine fiscal sovereignty for Asia’s market- and labor-heavy economies. Asian negotiators must recognize that this UN process was built precisely because OECD rules failed us. They must actively step up, support the Africa Group, and ensure Early Protocol 1 delivers unconditional, source-based taxing rights on all cross-border digital and technical services.”
Jeannie Manipon, APMDD Development Finance Program Manager and Tax and Fiscal Justice-Asia (TAFJA Co-Coordinator:
“While Asian countries’ contributions during the negotiations are noteworthy, it is deeply concerning to see some Asian delegations remaining passive or echoing outdated OECD frameworks that caused this fiscal crisis in the first place. With our region reeling from the climate crisis and debt, our leaders must wake up, break away from OECD influence, and fight for a binding, equitable UN tax treaty that serves our countries’ sustainable development.”
“Civil society leaders insist that only a robust and ambitious UN Tax Convention can deliver benefits for sustainable development, but some rich countries and corporate lobby groups are attempting to water it down. Debates on the Framework Convention text and early protocols on taxing cross-border services and tax disputes saw their resistance to reforms.”
Tony Salvador, Legal Advisor, Third World Network:
“Taxation of cross-border services, especially through digital means, is crucial for us in Asia. The century-old international architecture allows companies to evade taxes and the foregone revenues disproportionately hurt developing nations. A radical reform is needed.”
Contact:
Lani C. Villanueva
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