As calls grow to shift tax governance from OECD clubs to the UN, a hard question emerges: can legitimacy and enforcement coexist in global taxation?
By P. Sesh Kumar
New Delhi, February 5, 2026 — Can the World Democratise Tax Rules Without Breaking Tax Enforcement?
The article by Mr Mahadevan, IRS lands its punch with elegant simplicity: global tax rules today are written largely by rich nations for rich nations, while developing countries like India sit at the edge of the table, invited to comply but rarely to co-create. Its central argument—that shifting global tax governance to the United Nations could democratise rule-making and reclaim lost revenues for the developing world—is morally powerful, fiscally seductive, and politically combustible.
And yet, like most seductive ideas in global governance, it is both right in diagnosis and optimistic in prescription.
At the heart of the article lies a truth few policymakers openly acknowledge. The international tax system was never designed with countries like India in mind. It evolved around capital-exporting economies—places where multinational headquarters sit, not where value is created through consumers, labour, and markets. For decades, the rules privileged “residence” over “source,” intellectual property over physical presence, paper profits over real economic activity. The result has been a surreal world where a cup of coffee sold in Mumbai quietly produces taxable profits in Ireland or the Caribbean before the foam settles.
In that sense, the article is absolutely right: global tax rules are not technical curiosities—they are silent architects of inequality. When India loses revenues equivalent to multiple public health budgets through profit shifting and tax avoidance, this is not clever accounting; it is development leakage. It means fewer hospitals, thinner safety nets, slower infrastructure and constrained state capacity. Global tax policy has become social policy by stealth.
The author is equally persuasive in exposing the power imbalance behind today’s rule-making. International standards have largely emerged from elite forums dominated by advanced economies—especially the Organisation for Economic Co-operation and Development (OECD) where “consensus” has historically aligned neatly with rich-country interests. Developing nations are often invited late, consulted lightly, and expected to implement faithfully. They are rule-takers in a system they never shaped.
Seen this way, the call to move tax governance to the UN feels instinctively just. The UN symbolises inclusiveness, legitimacy, and the idea of one-country-one-voice. It reflects the real global economy—not just its wealthiest corners. Politically, it offers developing countries a platform to challenge a framework that quietly normalised profit shifting as smart business strategy.
So far, the article’s diagnosis is hard to dispute.
Where realism must step in—gently but firmly—is at the point where moral appeal meets institutional reality.
Because the UN, admirable as it is in vision, has rarely been effective in arenas that require speed, enforcement, and technical precision. On wars it condemns but cannot stop. On human rights it documents but cannot punish. On sanctions it declares but struggles to enforce. On funding it pleads rather than commands. It is a magnificent parliament of principles-and a fragile machine of execution.
International taxation, unfortunately, is not governed by ideals alone.
It is about real-time data exchange, forensic audits of multinational structures, sophisticated transfer pricing analysis, rapid dispute resolution, confidential financial information flows, and relentless follow-through. It requires digital infrastructure, specialised talent, legal harmonisation, and political willingness to challenge corporate power embedded in national economies.
These are precisely the areas where the UN has historically faltered.
By contrast, for all its democratic deficits, the OECD-centric system has delivered operational tools that actually function—automatic exchange of financial information, common reporting standards, base erosion frameworks, and coordinated compliance mechanisms that tax authorities can plug into daily work. These achievements were possible not because the OECD is fairer, but because it is smaller, technical, and execution-focused.
Moving the entire machinery of global taxation into the UN risks turning enforcement into geopolitics. Rich countries will negotiate endlessly. Developing countries will demand redistribution of taxing rights. Consensus will emerge slowly, diluted by carve-outs and compromises. Corporations will lobby quietly in capitals while diplomats argue in New York. By the time a grand global tax framework materialises, business models would already have evolved around it.
There is also a brutal funding reality. The UN struggles to adequately finance peacekeeping missions- expecting it to build and sustain a high-tech global tax data network, train thousands of specialists, run dispute resolution systems, and monitor compliance worldwide is optimistic bordering on fantasy unless rich nations suddenly become generous. History offers little comfort on that front.
So the uncomfortable but necessary conclusion emerges:
The UN is exceptionally good at setting moral direction. It is structurally weak at running hard regulatory machinery. Which does not make the article wrong—it makes it incomplete.
Its greatest strength lies not in promising a perfect alternative but in exposing the legitimacy crisis of the current system. The OECD-dominated model increasingly looks like a private club writing global rules. As digital businesses explode, intangibles dominate value creation, and profits float effortlessly across borders, old tax principles are cracking visibly. Developing countries are tired of bleeding revenue under a framework that was never neutral to begin with.
A stronger UN role could rebalance political power, force equity into negotiations, and embed development concerns into the architecture of future rules. Even if technical execution remains elsewhere, political ownership at the UN level could prevent advanced economies from quietly shaping outcomes behind closed doors.
In that sense, the UN may never be the world’s tax administrator—but it can become the world’s tax conscience.
The real future of international taxation is therefore unlikely to be a dramatic overthrow of the existing system. What is emerging instead is a hybrid model.
Political legitimacy, fairness debates, and redistribution of taxing rights increasingly anchored in inclusive global forums like the UN.
Technical standards, data platforms, compliance tools, and enforcement mechanisms continuing through specialised bodies and capable national tax administrations.
In simple terms: legitimacy above, machinery below.
For countries like India, this also means that global reform alone will not suffice. Massive investment in international tax capacity is essential-skilled auditors, advanced analytics, treaty expertise, real-time data use, and institutional strength. A fairer global framework without domestic enforcement muscle will remain a paper victory.
Legitimacy With Teeth, Not Declarations Alone
The path to fair global taxation does not lie in institutional musical chairs. It lies in combining democratic legitimacy with ruthless operational capability.
The UN could (but would it?) anchor political ownership of global tax rules, ensuring developing countries shape principles, allocation of taxing rights, and equity norms from the outset.
Technical bodies should continue building enforcement frameworks—information exchange systems, compliance standards, dispute resolution tools—where speed and expertise matter most.
Developing countries must simultaneously build strong domestic tax administrations capable of using these tools effectively.
And success must be measured not in communiqués but in recovered revenues, reduced profit shifting, faster resolutions, and restored fiscal space for development.
The article is right to challenge an unfair system. It is right to demand inclusion. It is right to link tax rules with inequality and state capacity.
Where it leans too hopeful is in assuming that changing the forum will automatically change the balance of power. The UN can make global taxation fairer. It cannot by itself make it faster, enforceable, or immune to geopolitical muscle.
Real reform will come not from replacing one institution with another, but from fusing legitimacy with capability—conscience with competence.
And in a world where trillions move at the speed of algorithms, one truth is now unavoidable: Global tax rules can no longer be written by a few and paid for by the many.
But they also cannot be enforced by ideals alone. The challenge of the coming decade is not choosing between justice and efficiency—it is finally engineering both together. A tall order indeed.
(This is an opinion piece. Views expressed are author’s own.)
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