India Votes For Shifting Global Tax Reins From OECD In The UN

In a major move in the UN, India votes for shifting global tax reins from the OECD. India is among 125 countries that voted in favor of a resolution calling for a UN Tax Convention. It would change the global tax scenario.

UN Global Tax Resolution [Credit-Mylnd.Net]

According to tax experts in India as well as at the global level, It is a historic move in the sense of a more equitable tax system that will shift the reins of decision-making from the OECD.

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WhyIndia Favors Shifting Global Tax Reins From OECD:

The OECD governs the current tax system globally. It is a 38-member group mainly dominated by rich countries, like the US, UK, Netherlands, Switzerland, Japan, France, Germany, etc.

According to Parmod Kumar, former vice president at the income-tax appellate tribunal, the current taxation rules are generally biased towards capital-exporting countries and the OECD perspective and their commentaries.

The OECD Forum [Credit-Finacial Times]

The OECD Forum works on the 'Two Pillar Solution.' Pillar one deals with taxation in the digital economy, the granting of tax rights, and the allocation of profits of MNEs to customer-based countries. Pillar two prescribes an effective minimum tax rate globally.

The OECD has an Inclusive Forum to deal with a range of issues. It is not an inter-governmental body but works together in collaboration with non-OECD member countries.

However, many countries like India have concerns about the method of allocation of profits to source countries under Pillar One. According to experts, the UN Framework could help developing countries get a better say.

The UN Convention on Shifting Global Tax Reins From OECD:

The resolution was passed by the UN General Assembly in a ratio of 125:48 in New York on Wednesday. The OECD member countries voted against the resolution while India, other BRICS nations, Brazil, Russia, and China voted in favor. African nations have tabled the resolution.

The UN Resolution Tabled By African Nations [Credit-Africa Tax Review]

The new UN resolution calls for the creation of an ad-hoc inter-governmental committee. There should be no more than 20 member states while taking into consideration gender and regional balance.

The OECD has an Inclusive Forum to deal with a range of issues. It is not an inter-governmental body but works together in collaboration with non-OECD member countries.

Under the new resolution, there is a two-step taxation formation procedure adopted. The first step is that within a year to reach an agreement on the terms of reference. The second step is to develop a UN Framework Convention on International Tax Co-operation.

A think tank, The Tax Justice Network, has welcomed the UN resolution. It assumed that the world would lose nearly $5 trillion to tax havens over the next decade if the new UN tax convention was not applied.

UN Convention For Global Tax Reins [Credit-Transit magasin]

After the adoption of the new UN tax convention, the inherent bias of current taxation towards the OECD would become much less relevant and provide the way to a new path.

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In the new resolution, a wide range of issues, like aggressive tax avoidance and evasion, illicit financial flows, recovery of stolen assets, and even taxation of the digital economy could be included in the reference term.

According to tax experts, practically the new arrangement will achieve a fair share of taxes to the source jurisdictions. The source jurisdiction means the customers-based approach like India. It would indeed provide the developing world with a global consensus on fair and equitable international tax rules.

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Cash Trapped Pakistan Imposes Exit Fee on Afghan Refugees

A shocking move by the Pakistani authorities, cash-trapped Pakistan now imposes an '$830 exit fee' on Afghan Refugees. The nation has come under fire for this move of imposing an exit fee.

Afghan Refugees pay Exit Fee [Credit-The Guardian]

Afghan Refugees, who left their country in August 2021 from fear of Taliban's persecution, are waiting for the western nations human resetllement schemes. According to sources, each refugee is charged about $830.

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Pakistan's Exit Fee on Afghan Refugees is Shocking and Frustrating:

Western countries' diplomats and the United Nation have condemned the Pakistani move. They described it as "shocking and frustrating." A senior diplomat responded The Guardian question, "I know it is very tough economically for Pakistan but really, to try to make money off refugees is really unattractive." 

 

Western Diplomats and the UN slammed Pak government's Move [Credit-VOA News]

The diplomat further added that the issue has also been raised by the two UN agencies, the UN refugee agency [UNHCR] and the international organization of migration [IOM].

The diplomat also mentioned that it has been raised in capitals and headquarters. I suspect everyone has passed the message and Afghan refugees concerns to their Pakistani counterparts.

Pakistan's Stand on Exit Fee for Afghan Refugees:

Pakistan had set the 1st November deadline for Afghan refugees to leave. After the expiration of the deadline, Pakistan began the mass deportation process of undocumented Afghans.

According to Pakistani authorities, thousands of Afghans with expired visas or incorrect documents have been living in the country since the Taliban took over  power in 2021. These refugees are waiting to restart their work in western countries because most of them are eligible on humanitarian grounds.

Afghan Refugees pay Exit Fee [Credit-BNN Breaking]

According to reports, the UK government has planned to settle 20,000 Afghanis while the Biden-led government in the US has agreed to settle 25,000 Afghans.

As per the Pakistan rules, Afghan refugees can only pay the amount $830 via credit cards. The bitter truth is that maximum refugees do not have access to credit cards. Another diplomat said that we need to adopt the cooperative approach to help refugees.

Even Pakistani official flagged their concerns initially when they were told to charge $1000 but the amount was later reduced to $830. A diplomat added that if Pakistan wants to facilitate the process of settlement of refugees in the west then they should not make it more complicated.

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Piyush Goyal Signs The IPEF Supply Chain Resilience Agreement

Indian Commerce Minister, Piyush Goyal,  has signed one of its kind the IPEF [Indo-Pacific Economic Framework for Prosperity] Supply Chain Resilience Agreement. He is on a visit of a four-day to the United States. The minister has participated in many events and signed some agreements.

Piyush Goel signs IPEF Agreement [Credit-The Print]

Union Minister signed the first of its kind supply chain resilience agreement in the US. On 13th November, The minister participated in the Investors Round Table. It is organized collectively by the US-India Strategic Partnership Forum and Indiaspora.

Piyush Goyal Signs The IPEF Supply Chain Resilience Agreement:

IPEF is an abbreviation of the Indo-Pacific Economic Framework for Prosperity. India has signed the reputed agreement and joined with the US and 12 other Indo-Pacific Economic Framework for Prosperity partners.

Union Minister said the IPEF supply chain resilience agreement will "fortify and strengthen" the global supply chain. Other signatory countries are Australia, Brunei Darussalam, Fiji Indonesia, Japan, The Republic of Korea, Malaysia, New Zealand, the Philippines, Singapore, Thailand, and Vietnam.

About The Indo-Pacific Economic Framework for Prosperity [IPEF] Agreement:

The IPEF global supply chain resilience could be a countermeasure of massive supply reliance on China. The world has faced severe supply disruptions, especially during the Covid wave.

IPEF Supply Chain Resilience Agreement Released [Credit-East Asia Forum]

Under the agreement, the IPEF partners will provide a framework for a collective understanding of significant supply chain risks, like improving crisis coordination and response to supply chain disruptions. 

The framework agreement will also ensure that a sufficient number of skilled workers and businesses, especially micro, small, and medium-sized enterprises benefit from robust, resilient, and efficient supply chains. It will focus on upskilling and reskilling of workers.

Piyush Goyal Described First-of-Its-Kind International Agreement:

The Minister wrote a post on X after signing the agreement, " First of its kind international agreement will fortify and strengthen the global supply chain." He also thanked his US counterpart Gina Raimondo for her leadership and personal commitment towards a more resilient future.

The IEPF was launched on May 23, 2022, in Tokyo, Japan last year. According to the US Department of Commerce, there have been server IPEF ministerial statements that worked constructively. There have been four rounds of in-person negotiations and several virtual meetings held.

Summit for IPEF Agreement [Credit-Nikkei Asia]

The Commerce and Industry Minister visited the Tesla Factory Unit in Fremont and interacted with the senior officials of the company. The Minister stated that the US electric car maker is on its way to double its component imports from India.

He wrote on X that "delighted" to see Indian engineers and finance professionals working in senior positions and contributing to Tesla's pioneering journey.

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India's Diplomatic Move Followed Against Canada In The UNHRC

India's diplomatic move followed by other nations to recommend Canada strengthen measures that prevent attacks on worship places and effectively address hate speech. The initiative took place during the UN Human Rights Council Review meeting.

UNHRC Meeting [Credit-UN Web]

Diplomats from India, Bangladesh, and Sri Lanka shared their insights and recommendations and presented the proposals during the meeting. Indian diplomat noted and shared the issues of the National Housing Strategy Act and the Accessible Canada Act.  

India's Diplomatic Move Followed:

Indian Diplomat Mohammed Hussain said during the meeting that Canada should further strengthen the domestic framework to prevent misuse of freedom of expression, inciting violence, and disallow activities promoting extremism, and hate crimes against places of worship, and minorities.

Indian Diplomat at the UNHRC Meeting [Credit-The Print]

"We note the enactment of the National Housing Strategy Act, Accessible Canada Act, and National strategy to combat human trafficking.”

Other than Indian diplomat, Bangladesh diplomat Abdullah Al Forhad urged Canada to intensify its efforts to combat racism, hate speech, hate crimes, and discrimination against migrants and Muslim minorities. 

Bangladesh also called on Canada to take measures to reduce carbon emissions and address the negative impacts of climate change. However, Al Forhad commended Canada's progress in the protection of human rights and combating human trafficking.

Sri Lankan diplomat Thilini Jayasekara also urged Canada to agree to the Convention on the Protection of Rights of All Migrant Workers in spirit and words. Take essential steps to combat racial discrimination, oppose misinformation against minorities, and follow up on global human rights recommendations.

Tussle In India-Canada Relations:

Canadian PM Justin Trudeau accused India of violating the Vienna Convention in September this year. During the ongoing diplomatic crisis, India forced the Canadian authorities to move out their 40 diplomats.

Tussle in India-Canada Relations [Credit-The Wire]

Trudeau spoke out to the media that if bigger countries can violate international law without consequences, then the whole world gets more dangerous for everyone. He further added we reached out to our friends and allies, like the US, to work on this serious violation.

India has rejected Canada's accusation and made it clear that this is not India's way of functioning. New Delhi has provided evidence to Canada how their soil has been a safe haven for terrorists and urged them to act against those. 

India suspended visa services in Canada in September which has now been partially restored. India also accused Canadian diplomats of interfering in India's internal matters and shifted 40 of them.

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