This transcript has been edited for clarity.

David D. Stewart: Welcome to the podcast. I'm David Stewart, editor in chief of Tax Notes Today International. This week: the U.N.'s role in tax policy.

At the beginning of October, the podcast team traveled to Lisbon for the International Fiscal Association's annual congress. While there, we recorded several interviews, as well as some sounds of the city, which you heard at the beginning of the episode. We'll be releasing those interviews in the upcoming weeks, so keep an eye out for that in your podcast feed.

This week's episode features Elisângela Rita, a senior policy adviser at the International Institute for Sustainable Development (IISD). She was previously a member of the U.N. Committee of Experts on International Cooperation in Tax Matters.

Her discussion with Tax Notes reporter Sarah Paez focuses on how the United Nations has shaped international tax policy and reform. They also talk about Elisângela's research with the IISD, and how she sees the U.N. tax convention negotiations evolving.

Now, one note before we get to the interview: Since we were recording this on the road, the audio may sound a bit different than our usual interviews. All right, let's go to that interview.

Sarah Paez: Thank you so much, Elisângela. Welcome to the podcast.

Elisângela Rita: Thank you very much for having me.

Sarah Paez: Just to get started, how did you start in tax? What's your background?

Elisângela Rita: I started off my tax career at the Angolan tax administration, Administração Geral Tributária. Quite young, I must say. So it was really nice to see — at the time, it was still a tax department at the Ministry of Finance, and so, that was a very good introduction to public finance in general. Understanding — because, as a tax department, we were very much more involved with the functioning of other Ministry of Finance activities.

We then went through a tax reform, and it was also very good to be a part of that process, developing new policy, and being a part of dissemination and training and, really, the administrative reform that is involved. Which then led to the creation of the tax authority, the tax administration. And so, having seen the tax administration from day 1 was really something that I value.

From then onwards, I was always working as a legal tax official, with policy analysis, legal drafting, and taxpayer complaints and all of those. But then, I found the world of international tax, and then I started to slowly fall in love with it, fall for the trap, the amazing trap of international tax. And here I am until now, since then.

Then I got into international tax through international cooperation and international tax policy, and started to get engaged with the work of the international bodies, representation of the tax authority in these different fora. And really understanding benchmarking with other countries, understanding what is happening. Taking the experience I had with domestic administration into a global setting, participating in that exchange. That's the trajectory, and I think it's an interesting path, because I always said I was not going to work with tax, when I was in university. And so, yeah, I am biting my tongue.

Sarah Paez: It sounds like you had quite the interesting journey. I was wondering, you now work in a more academic, research-oriented role. So how did you make that jump from government and even intergovernmental processes to more academia, research, looking at the problems from high level?

Elisângela Rita: The jump was, I'd say, more of small jumps. I worked for a period with the Southern African Development Community, and so, I had a more regional exposure. I was able to look at the concerns of other tax administrations in the region, in the southern African region, and that really opened my mind. It made me curious to understand, how could I best serve the cause of tax administration? Having looked at it from the inside, having looked at it from a half-outside, regional perspective.

And then I realized that the best way that I could influence or participate in improving tax administration — not only in my country but in other developing countries — was by participating in technical advice. This is the role that research brings is, it really brings in what governments often don't have the resources or the time [to do], or they do, but they might need some support, some addition to it.

And so, I think, I believe, research and evidence-based technical assistance is an important part of development, of policy development. That's where the research comes in. It's not research in a strictly academic sense; the purpose is to inform technical assistance and give, really, as I said, evidence-based support.

Sarah Paez: I think that's actually a perfect lead-in to my next question. I wanted to ask you about your time on the U.N. tax committee. What was that experience like, and how did you incorporate that evidence-based policy research into your time on the committee?

Elisângela Rita: It was a great time. It was a great four years. I started off while still at the tax authority, so it was good to see it from an outsider's point of view. See international tax policy, see it in the making, see it in the reform, and then, bring it back home and discuss it with colleagues and see how it could be implemented.

Really, that's what the experience gave me. It gave me — I think I was able to contribute by taking my practical experience with understanding that sometimes these debates become very technical, theoretical, and high level. And it's good to have people who are aware of how to use those tools every day, and can actually stop you in your tracks and say that "this is a beautifully drafted piece, but we will never use it, because we have these constraints or because it really doesn't speak to us."

And the other thing that it also gave me is a perspective beyond my own country and my own experience. As a member of the committee, we're obviously not representing our countries directly. We were there as experts, in our personal capacity. That also forced me to take off my hat from constantly thinking about what works in my country, and just thinking about, OK, what do other developing countries, and even developed countries, what are tax officials in the world struggling with? And be able to work on topics that are not a priority in my country.

My country's oil-dependent, for instance, oil-dependent economy or mineral-rich economy. And some of the topics may not be a priority right now, but that does not mean that those topics should not be addressed. And maybe even having participated in those discussions may help to change those priorities and who knows?

I think it was a very enriching experience for being within an international process, but also being exposed to other professionals and other experts. And really, I see the U.N. as the most inclusive body to address some of these concerns and to reshape — even if not to offer specific solutions, but to bring everybody to the table to have the conversation and have the interested parties devise the solutions.

Sarah Paez: On that same topic, during your time on the U.N. tax committee, what were some of the policy outcomes or recommended legislation, or really just achievements that you are most proud of, that you would point to and say, "This is what we achieved during my time on the committee?"

Elisângela Rita: I think the membership that I was a part of the U.N. tax committee was very driven into really aligning some of the outstanding issues and some of the work that had already been started by the previous membership. I think, one of the significant steps we took, I think, the first and perhaps the most notable one was the work on the article — what is currently being called article XX —which is the service fees provision, or article AA, which deals with service taxation and allows for source taxation of services fees on gross basis, and especially now with the state of digitalization, I think was a really important step that this membership took.

Another one I'm very also happy about is the expanded definition of royalties that we worked on article 12(3). It now includes software payments, enabling source taxation, even when payments are not tied to copyright use. I think that was also an important step.

We worked on a number of items, and I think the other one I would also point out is article 5(a), which talks about natural resource taxation. And it introduces a source tax for income from natural resource exploration and exploitation, and it lowers the threshold for taxable presence to 30 days. And this work, actually, the International Institute for Sustainable Development also participated in this work. It's notable in two ways for me in that sense.

And then I think, one of the other ones that I'm also very happy about and I was a strong advocate of was actually not a change — and the absence of change was the victory, I'll say — was article 5(3)(b), which is the provision for service permanent establishment that was not changed. There was a proposal that it would be removed from the U.N. model. And we managed to retain that provision, because there's quite a large discussion on physical presence through digitalization and the arguments that digitalization have made physical presence less important as a means to tax, to dictate which country should tax the revenue. That argument is valid.

However, it's true that in many countries, physical presence is still very relevant. Most developing countries' economies are still very tangible, and digitalization, it exists, it's present, you could feel it, but we still need to provide solutions and allow for countries to have these policy options if they don't want to, if they're not ready to, adopt these new provisions that don't consider physical presence as important as a nexus for taxation.

I think it was important that we kept that provision because the U.N. is then communicating. Sometimes the mission is also a communication, and I think, omitting or refraining from that change communicates to countries, if that is a priority for a specific country, then they should have at least an option, a policy guidance on it.

And I think the last one I'll mention is the change of the U.N. model. And I think that's very simple, but it's groundbreaking, because the U.N. model has existed for so many years, and we, for the first time, proposed the introduction of a change to remove the reference to developing and developed countries and reflect a broader applicability.

Sarah Paez: And I actually think that's a perfect segue to continue on this U.N. thread, but to a different committee. And I think, just for our listeners, I want to say, there are two major committees in the U.N. that work on tax. One is the Committee of Experts [on International Tax Cooperation], which Elisângela was just talking about, but there's also a newer committee, the Intergovernmental Negotiating Committee for a Framework Convention on International Tax Cooperation. And so that one is much more of a political process.

And in your work, Elisângela, with IISD, you've written a lot about this process and about the issues that countries are currently grappling with. I wanted to ask you maybe just to give a little bit of an overview of how you see the U.N. discussions evolving over the next three years of the committee's mandate.

Right now, the countries are still in the early stages. They're trying to decide how they're going to tackle these issues, some of which you even talked about, like the taxation of cross-border services income, dispute resolution that sometimes even comes from the taxation of cross-border services income. Let's start off with, how do you see these discussions evolving?

Elisângela Rita: I'm very hopeful and positive about these discussions. I think the fact that governments are actively participating makes all the difference. The U.N. tax committee plays an important role in focusing on technical aspects and really putting the political aspects aside. And I think there's a very important place for that.

Having now an intergovernmental committee engages the other important stakeholders and perhaps the more important stakeholders and policymakers. This is why I have faith in this process because, countries have, because of it, included in their agenda, in their political agenda, to discuss international tax. Whereas before, there was no intergovernmental commitment to do so.

And this is what this process brings. That on its own should not be underestimated, however long it takes, and these processes are not traditionally fast. However long it takes, the fact that countries are sitting down to commit to finding tax rules that work for everybody is a big step. It's been happening in other sectors, climate, commerce, etc., and finally with tax, I think it's happening. That makes me hopeful for the process.

And I know some of the people working on it are great experts and, really, people we can trust with this work. That's the second reason that makes me hopeful for the process. I think we are in good hands, whether it be developed or developing countries. We're even questioning this distinction, this terminology. I'm very positive about the process.

Sarah Paez: I think also it's interesting to note there was some discussion about, with the U.S. pulling out of the talks, how would that go for the rest of the countries? But from my observations and reporting on the discussions, it seems like they're still going full steam ahead.

What are your perceptions of that? Do you also see that happening? Have countries had to change their tack a little bit, or are they still feeling fairly hopeful?

Elisângela Rita: Yeah. I think that's the beauty of an international process. A body like the U.N. is well-placed to invite everyone to the table. And, of course, countries have the sovereignty to engage as far as they want to, and leave or join at any point in the process. This is why an inclusive process is so important.

And there are countries that don't have this as a priority, and I think that's worth being respected. The process continues, and perhaps in the future, the majority of the countries are engaged, but those that are not maybe could join in the future or not. I think, the beauty of this is it's not country-specific, and not even region-specific. It's trying to find common ground. And that is for the benefit of even perhaps those that are not in the conversation at this point.

If you follow the discussions, you'll see, it's very, very good to hear countries in Europe align with countries in Latin America on one topic, and disagree on another topic with a country from South Asia, agreeing with a country in Southern Africa. Really distinct geographies and economies, but you can see that there are some areas of convergence. I don't think the process is compromised if one or another country does not align at the moment, and I think even that alignment should not be taken as permanent. I think this is dynamic. We'll see how it develops.

Sarah Paez: One thing I wanted to ask you as well — we've talked a little bit about your involvement with IISD. So how does the research that IISD does supplement the negotiations, or at least help countries grasp the issues that are really at the forefront of these discussions?

Elisângela Rita: We're following these discussions very closely. We wrote initially a brief just explaining briefly how the process works and how it is structured, how it was structured at the time. We then also wrote a bit on the perspective protocols that the future convention will have. And our idea, our goal, is to provide technical and evidence-based advice or contributions wherever we can.

We think we can serve countries in all geographies by doing the research that the countries may not have done, or that could supplement work that has already been done. We've got quite a diverse team that involves, not just the tax program, but also the investment program. And we're very interested, for instance, in the work on dispute resolution, because we think this is perhaps one of the more important areas. And I think the U.N. negotiating committee agrees, hence it being selected as one of the priority topics.

We're very interested to contribute to what would a global dispute resolution mechanism, for tax disputes specifically, what would that mechanism look like? We've started mapping out some of the gray areas that exist in the tax dispute resolution scene right now. We've started looking at how, for instance, in the absence of this global tax dispute resolution mechanism, many taxpayers resort to investor state dispute settlement provisions. And we think that could be problematic for a number of reasons.

And so it's really the moment in my view that the tax and the investment community come together and start looking at this, because tax has been dealt with traditionally by tax policymakers. But more and more, the discussion becomes less about tax, and more about resource mobilization. And if you are speaking to policymakers about the need to mobilize resources, you cannot only talk about how taxes influence that resource mobilization. You have to be realistic and address the issue of investment attraction, which is an important factor that doesn't come into the conversation with tax policymakers.

On the one hand, you have governments trying to attract investment, lowering their tax base or offering more beneficial regimes, promising more, and eroding, really, the revenue base. But at the same time, you have this message that you need to strengthen your tax base, you need to sign more agreements, protect source-based taxation. There's a dissonance in the two dialogues.

And I think the debate on dispute resolution can be a way to bridge this conversation and say, "OK. Why are there still so many tax disputes? Why are so many of them not being won by governments? Why are they still so costly? Why is it that, for instance, the mutual agreement procedure mechanism that exists is not widely used in many countries? And so, why are these solutions not working?" And well, maybe not working for governments, but perhaps they've been working for investors, which is good because investors do need tax certainty and judicial certainty. But is that the case in every country? I think there's a lot that we can discuss.

And finally this is being brought to an intergovernmental conversation. It needs to be broader than it has been. That's what I would say. This is what we are proposing to also research. We've actually started this research, and we're hoping to contribute to the dialogue and to solutions, if there are [solutions]. We're diving deep into the unknown so that governments or tax professionals, tax administrations don't have to. I think there's just so much to deal with when you're in a tax administration. And I know the more the merrier, as much help as you can get is always welcome.

Sarah Paez: Absolutely. I also think that this conversation is a perfect segue into talking a little bit about the work that IISD has done regarding tax incentives. During the fourth Financing for Development Conference that was held in Seville over the summer, IISD and some other groups, and even some governments, launched a commitment to designing and implementing evidence-based tax incentives, or simply using evidence to inform tax incentive policy.

I wanted to ask you a little bit — can you tell us a bit more about this initiative and how it seeks to improve government financing and tax fairness? And why is this so important?

Elisângela Rita: Yeah. In Seville, we had the pleasure of launching the Coalition on Tax Expenditure Reform. This was one of the initiatives under the Seville Platform of Action. That's really one of the many ways that the Financing for Development Conference is trying to implement these resolutions, at a more practical level. It is a coalition between IISD and ODI Global, the International Center for Tax and Development, the Council on Economic Policies, and the German Institute of Development and Sustainability, IDOS.

These organizations are organizations that already work with tax expenditures from different angles, and we came together to really have targeted actions, but that are demand-driven. We want to make sure we can add value to the work that's already been done in tax expenditures, but really to offer directed support, and more importantly, coordinated. Because we already, as I said, individually work with tax expenditure reform in one way or another.

I think coordinating efforts is going to be for the benefit of all. We want to make sure that we're providing aligned support. I think all five organizations are ideologically aligned, so that really helps the work. And, yeah, the coalition is just formed, and hopefully we will have some of our first developments the beginning of next year. IISD has a, as you mentioned, under the tax and debt program, the work on tax incentives for sustainable development, and this workstream is really dedicated to looking at tax incentives in a sustainable way.

Like I said earlier, the dialogue has traditionally been separate, and tax incentives are dealt with often, not even by tax administrations, not by ministries of finance. You'll find in many cases that the incentives are granted by investment promotion agencies, trade ministries, etc. Which is, in theory would be okay, but if there's no coordination between government agencies, then often many governments find that they're not aware of the impact of those incentives.

A country can establish a special economic zone, for instance, and in it include a number of incentives that make commercial sense and trade sense for investment attraction, but would potentially undermine its own tax policy, its own revenue goals. We believe that these conversations need to be had in the same room, and this is what we're trying to add to the topic and bring research to support it.

We find that, for instance, most profit-based tax incentives, such as tax holidays, don't produce the expected results. They don't necessarily guarantee more investment or more quality investment, more sustainable investment, both in terms of social benefits and economic benefits, but also in terms of time, duration of those investments. You'll have short-term investors coming in for the incentives, and you'll have low value added to the economy or to the value chain.

These are some of the issues that IISD is working on to bridge. But also, through, I think, joining forces, we really hope to offer this kind of support to many countries. And I have to say, I'll repeat, it's not necessarily a developed and developing economy issue. I think tax expenditure reform is a global concern, because of the pressures for resource mobilization. This debate is ever more important. Hopefully the coalition can play a positive role in this.

Sarah Paez: Absolutely. I think you are correct that it's only going to become a more important issue that people will be wanting quality research on. I'm excited to see more of that.

Just one last question for you: Is there anything else you want to tell our listeners, especially looking ahead on international tax issues, any of which we talked about or any maybe we didn't get to discuss?

Elisângela Rita: No, I think we touched on the main developments of the beautiful international tax world. I say beautiful, I know I may be biased, but I think it's very interesting, very exciting. As a professional in the field, I am excited that this topic is more and more mainstream, and that tax policy is no longer is something discussed in the meeting rooms of tax administrations. That, for the longest time, this was more of — countries were at their own disposal to, either through bilateral treaties or through negotiations with investors, countries were really on their own, looking at these things, and negotiations are — I was a tax treaty negotiator for Angola, so I know, negotiations are not often easy. They're never easy, of course, and many times you're not at the same bargaining power.

I'm glad to see a global movement, so that we can find the areas of alignment. And actually, I think what we'll realize is that we don't defer as much as we thought, and that we actually agree more than we disagree, I would say.

Sarah Paez: Absolutely. International tax, you heard it here, folks, it's only growing. Well, thank you so much, Elisângela, for coming on the podcast. Really appreciate it.

Elisângela Rita: Thank you so much. This was a very pleasant conversation. Thanks for having me.

David D. Stewart: That's it for this week. You can find me online @TaxStew, that's S-T-E-W, and be sure to follow @TaxNotes for all things tax. If you have any comments, questions, or suggestions for a future episode, you can email us at podcast@taxanalysts.org. And as always, if you like what we're doing here, please leave a rating or review wherever you download this podcast. We'll be back next week with another episode of Tax Notes Talk.

Tax Analysts Inc. does not provide tax advice or tax preparation services. The information you have seen and heard today represents the views of the presenters, which may not be the same as those of Tax Analysts Inc. It may include information obtained from third parties, and Tax Analysts Inc. makes no warranties or representations of any kind and is not responsible for any inaccuracies. Nothing in the podcast constitutes legal, accounting, or tax advice. The tax laws change frequently, and neither Tax Analysts Inc. nor the presenters can guarantee that any information seen or heard is accurate. Also, due to changing tax laws, any information broadcast or downloaded after its original air date may no longer represent the current views of the presenters. If you have any specific questions about any legal or tax matter, you should always consult with your attorney or tax professional.

All content in this broadcast is protected under U.S. and international laws. Copyright © 2025 Tax Analysts Inc. Unauthorized recording, downloading, copying, retransmitting, or distributing of any part of the podcast is strictly prohibited. All rights reserved.