As negotiations on the proposed United Nations Framework Convention on International Tax Cooperation continue in Nairobi, the global debate on tax governance has reached a turning point. For the first time, the world is attempting to craft a multilateral tax agreement under universal membership — a stark contrast to decades of global tax norm-setting dominated by limited forums. The third substantive session of the Intergovernmental Negotiating Committee (INC), held from 10 to 21 November 2025, arrives at a moment when developing countries, and Africa in particular, are pressing for rules that more accurately reflect their economic realities and administrative capacities.
The Nairobi round is not simply another meeting in a long diplomatic process; it is where the most technically complex and politically sensitive aspects of the Convention are being tested. Despite significant differences among countries, there is a shared recognition that the international tax system has not kept pace with changes in global commerce, especially the growing dominance of digital and service-based business models. For African economies—where revenue needs are rising but traditional tax bases are narrowing—the outcomes of these negotiations could shape fiscal and development pathways for decades.
How We Reached This Point
The road to Nairobi formally began in December 2022, when the UN General Assembly adopted Resolution 77/244, establishing the mandate for the INC to draft a global tax cooperation framework. Although framed as a global initiative, the momentum behind this shift was strongly influenced by African countries, whose long-standing concerns about exclusion from global tax rule-making had gained visibility through the Addis Ababa Action Agenda and subsequent UN processes.
By December 2024, the INC had adopted the Terms of Reference for the negotiations, endorsed by 110 UN member states. These Terms of Reference defined the scope, structure, and workplan of the Convention and identified the first early protocol on taxation of income from cross-border services. A second protocol—on dispute prevention and resolution—was selected during the INC’s organisational session in February 2025 in New York.
Substantive negotiations began soon after, with the first two rounds held at UN Headquarters in New York in August 2025. The Nairobi session marks the continuation of a process scheduled to unfold through three meetings per year until 2027, when the final Convention and its initial protocols are expected to be submitted to the UN General Assembly’s 82nd session.
What the Nairobi Session Is Actually Debating
The Nairobi negotiations revolve around three interconnected workstreams: the Framework Convention itself, the taxation of cross-border services, and mechanisms for dispute prevention and resolution. The issues under consideration are highly technical, yet their implications are fundamental for all countries—particularly those navigating the modern, intangible economy with limited administrative capacity.
1. Taxation of Cross-Border Services
This workstream has become one of the most challenging. Much of the current conversation focuses on defining an adequate “nexus”—that is, the type of connection that should allow a jurisdiction to tax a foreign enterprise that operates without physical presence. Countries disagree on whether digital interaction alone should be sufficient, whether revenue thresholds are necessary, and how to ensure that rules remain adaptable to emerging business models.
There is also a nuanced debate over whether taxation should be based on gross revenue or net profit. Gross-based approaches are often favoured by countries with weaker audit capacity, but they may be too blunt for certain sectors. Profit-based approaches, on the other hand, require sophisticated data and transfer-pricing capabilities. Several delegations have argued that different sectors of services—such as digital platforms, engineering consultancies, or entertainment streaming—may require differentiated approaches because the underlying value creation differs significantly.
2. Dispute Prevention and Resolution
On this workstream, the tone of discussions has been more cooperative. Delegates generally agree that preventing disputes is far more efficient than resolving them. Many governments have highlighted the persistent information gapsthat hinder tax administrations from identifying risks early, especially in developing countries. The question of whether the dispute mechanism should be mandatory or voluntary remains unresolved. Some states prefer flexibility to choose mechanisms based on their administrative maturity, while others argue that an optional system will not sufficiently reduce uncertainty in cross-border taxation.
Another unresolved issue is whether dispute resolution should be handled through an overarching framework applicable to the entire Convention or embedded within each protocol. Countries have underlined that dispute frameworks must be accessible, timely, and designed in a way that does not disadvantage administrations with lower capacity.
An African Perspective: Why These Negotiations Matter
The negotiations unfolding in Nairobi represent a rare moment in which African interests align with broader global reform dynamics. Yet the African angle is not about seeking special treatment; it is about ensuring that emerging rules are grounded in the diversity of economies participating in global trade.
African markets are experiencing a rapid growth of service-based and digital business models, often driven by foreign enterprises that operate without physical presence. Without modernised nexus rules, many African jurisdictions risk continued revenue leakage simply because the international tax system was designed for a different economic era. The Convention provides a platform for countries to articulate the principles that would allow them to tax such activities fairly and predictably.
On dispute prevention and resolution, African countries stand to gain from frameworks that reduce administrative burdens and provide earlier access to information. For many tax administrations on the continent, disputes with multinational companies are resource-intensive and lengthy, often discouraging enforcement actions. An effective dispute-prevention mechanism could rebalance this dynamic by enabling African administrations to intervene earlier and more confidently.
Africa is also closely following the possibility of additional protocols—including those relating to the digital economy, tax-related illicit financial flows, environmental taxation, exchange of information, mutual assistance, and harmful tax practices. These areas mirror several longstanding concerns across the continent. If developed under the Convention, they could offer African countries a globally recognised instrument for tackling systemic vulnerabilities, from profit shifting to revenue flight.
The Broader Implications for Global Tax Governance
The Nairobi negotiations are significant because they test whether a universal platform can meaningfully reshape global tax cooperation. Negotiations of this scale and complexity typically stretch over many years, but what distinguishes the current process is the breadth of participation and the diversity of interests at the table. The INC includes all UN member states, and its Bureau—currently chaired by Ramy Youssef, Egypt’s Assistant Minister for Tax Policy and Reform—reflects geographic balance across the UN regional groups.
Success is not guaranteed. Reaching agreement on something as sensitive as taxing rights will require compromises across policy, politics, and technical design. However, even the act of negotiating these issues within an inclusive forum has already shifted the global governance landscape. The Convention could establish the first worldwide framework where tax norms are developed through universal membership rather than through selective coalitions.
For Africa, this shift matters. It signals a move toward a global system that recognises the continent’s fiscal challenges, administrative realities, and economic potential. Whether the final Convention delivers on these expectations will depend on the negotiations that continue in Nairobi and beyond.
