I Geo-Economics & ChokepointsSub-Saharan Africa
A Reading from Pretoria: The Africa Group Seeks to Move Tax Rule-Making from the OECD to the UN
- Institution
- Institute for Security Studies (ISS Africa)
- Author
- Peter Fabricius
- Country · language
- South Africa · English
- Affiliation
- Independent security institute, Pretoria
Summary
The analysis published in ISS Today on 11 September 2026 recounts the negotiation of the Framework Convention on International Tax Cooperation, which African countries are pursuing at the UN, as a calculation of winners and losers. The core issue is institutional rather than technical: whether rule-making authority stays with the OECD, made up of 38 developed economies, or passes to the UN, where every member state has a vote. It argues that the OECD-G20 two-pillar solution set out in 2021 and backed by more than 140 countries has not kept its promise to tax multinational companies where they earn their income. According to the text, the negotiations are roughly halfway through the formal timetable; alongside the framework convention, the co-chairs have put into circulation draft texts of two additional protocols, on cross-border services and on the resolution of tax disputes.
The conflict knots around three articles. On Article 5, which governs the fair allocation of taxing rights, the Africa Group wants a single element — such as the location of the market or the place where income arises — to be enough on its own to create a taxing right; it says the vague language of the current draft leaves companies room for manoeuvre. On Article 6, covering high-net-worth individuals, it demands that the phrase 'exploring coordinated approaches' be hardened to 'developing and implementing'. Article 7, which targets tax-related illicit financial flows, is opposed by OECD and EU members, Ireland foremost among them, on the grounds that lawful tax avoidance is being conflated with evasion. While Ireland and Italy argue that the objectives belong only in the preamble, the Africa Group and India want them in the body of the convention so that they bind. Logan Wort, former executive secretary of the African Tax Administration Forum, lists three gains that would mark success: decision by majority at the conference of the parties, an automatic alignment mechanism for conflicting bilateral treaties, and the right to tax remote services through gross withholding without requiring a physical presence.
Blind spot
The analysis is written largely from the frame of the convention's defenders: the Africa Group and a former African tax administration head speak, while OECD and EU objections appear only as obstacles. The cost of the administrative capacity and data infrastructure needed to turn the new authority into collection is not quantified. Nor does it weigh the chance of a multinational response, or the risk of duplicate rules from the UN convention running alongside the OECD system.
Talay assessment
Bottom line
This reading shows that the global tax fight is about authority rather than rates: for the first time the standard-setting monopoly of the 38-member OECD is being eroded institutionally. Circulation of the text and the draft protocols makes the process harder to reverse; yet unless the language of Articles 5, 6 and 7 is hardened, the outcome for the Africa Group will be a symbolic victory. The most likely direction is that the convention is adopted with broad participation while its revenue effect is spread over years, depending on implementation and capacity.
Likely effects
- Public revenuePositive6 months+
If taxing remote services through gross withholding is accepted, the collection base widens in low-income countries; the gain remains dependent on administrative capacity.
- Corporate competitionNegative1–6 months
The OECD's 2021 two-pillar solution operating alongside the UN framework puts more than 140 countries to the cost of complying with two separate rule sets.
- Diplomatic alignmentUncertainWeeks
The Africa Group and India standing on the same side on Articles 5 and 7 shows that the Global South's bloc play has moved into the tax arena.
Possibilities, ranked
- 1The convention passes, its language softens55%
The framework convention is adopted with broad participation but Articles 5 and 7 stay vague; the revenue effect comes in below expectations.
Watch: Whether the draft emerging from the Nairobi round writes the single-element test into Article 5 explicitly
- 2The Africa Group secures its main demands25%
Majority voting at the conference of the parties and the withholding right in the services protocol are accepted; the OECD's standard-setting monopoly is broken in practice.
Watch: Whether the physical presence requirement is removed from the draft services protocol
- 3The process drags on, the OECD gains joint governance20%
OECD and EU members write joint rule-making authority into the text; the negotiating timetable slips and the two systems run in parallel.
Watch: Whether the joint governance wording with the OECD is placed in the body of the convention or in the preamble
Probabilities are calibrated judgement based on the sources, not measurement, and are revised as new information arrives. Not investment advice.
Original publication: issafrica.org · 11 September 2026
This page summarises the institution's view and does not reflect the view of Talay Insight. No direct quotation is used.