Introduction
Illicit financial flows (IFFs) and base erosion and profit shifting (BEPS) significantly undermine the tax bases of emerging economies, particularly in Africa. IFFs, defined as the illegal movement of funds across borders, and BEPS, involving the exploitation of tax rules by multinational corporations (MNCs) to shift profits to low-tax jurisdictions, deplete resources essential for sustainable development and public services.1UNECA, Illicit Financial Flows: Report of the High-Level Panel on Illicit Financial Flows from Africa (Addis Ababa: UNECA, 2015). The UN Ad Hoc Committee’s zero draft Terms of Reference (TOR) aims to guide G20 members in establishing a governance system for international tax cooperation to address these issues and promote equitable sustainable development.2Deloitte, “Draft Terms of Reference for Framework on International Tax Cooperation Released”, 2024 This policy note advocates for South Africa to champion the UN Framework Convention on International Tax Cooperation (UN Tax Convention) within the context of its upcoming G20 presidency. This convention can play a crucial role in combatting IFFs and BEPS. By promoting robust global tax cooperation, the convention has the potential to yield significant benefits to Africa.
