Global Levies or Taxes

For multilateral institutions to be effective and independent they must have stable and adequate funding. There is a fundamental need for new financial mechanisms to provide for a strengthened and democratized multilateral system. Since the UN conference on Financing for Development in 2002, more intergovernmental attention has been given to the possibility of innovative sources of finance such as environmental charge, currency transaction taxation, taxation of arms trade, International Financial Facility as proposed by the British government, and remittance’s benefits as well as voluntary contributions through credit cards and lotteries.

“There is a fundamental need for new financial mechanisms to provide a strengthened and democratized multilateral system.”

Several reports have been written on the feasibility of some of these innovative sources of finance by Member-States and UN bodies. In the note by the UN Secretary-General on innovative sources of financing for development, he calls for ‘major efforts by developing countries and the international community to mobilize additional financial resource’. Brazil, France, Chile and Spain have taken the lead in a campaign for Action against Hunger and Poverty emphasizing the need for innovative finance mechanisms if the Millennium Development Goals (MDGs) are to be accomplished.

Whereas the current intergovernmental debate about innovative sources of finance is placed within the framework of financing development and more specifically the MDGs, WFM believes that the debate should be seen in a broader perspective to also include the element of independent funding of multilateral organizations.

“WFM hopes to draft a treaty or convention for collection of revenues for funding the multilateral system that can be proposed and carried forth in intergovernmental processes.”

At present the most powerful countries provide the vast majority of funding for international organizations and possess an immense and unbalanced control over the political decisions of these organizations. To reverse this trend, WFM calls for a mixture of state and independent funding of international organizations to ensure fair and democratic decision-making processes exempt from power politics. WFM thus believes that independent funding for multilateral organizations would address the challenges and obstacles for achieving democratic global governance.

WFM specifically consider the global taxation of transnational currency transactions to be the most important source of independent funding and advocates a global implementation of the Tobin Tax. Eventually, in cooperation with other NGOs and legal experts, WFM hopes to draft a treaty or convention for collection of revenues for funding the multilateral system that can be proposed and carried forth in intergovernmental processes. Meanwhile, WFM monitors the intergovernmental processes on innovative sources of finance and stresses the need for civil society involvement in the debate.