Global Policy Forum

The 1999 Human Development Report, commissioned by the UN Development Program (UNDP), states on page 13 that "New sources of financing for the global technology revolution could be investigated, to ensure that it is truly global and that its potential for poverty eradication is mobilized." The report also mentions as an option for consideration the possibility of a "bit tax" -- essentially a tax on Internet e-mail, to raise funds for spreading technology to developing nations. UNDP has, however, made clear that the organization does not endorse any form of international tax.

The inclusion of the tax idea has raised concerns in the U.S., both in the Administration and in the Congress. The Clinton Administration has long been on record as being opposed to any form of global taxation imposed by the UN or any other international organization. On July 16, Assistant Secretary of State for International Organization Affairs David Welch sent a letter to UNDP Administrator Mark Malloch Brown reiterating the strong U.S. opposition to any form of international tax and asking for clarification of the UN's stance on global taxes. Mr. Malloch Brown responded on July 16, making clear that the inclusion of the idea for a "bit tax" in the report (which is an independent publication with editorial policies separate from UNDP) does not constitute UN support for any proposals for international taxation. Mr. Malloch Brown's letter states clearly that "UNDP does not advocate and will never advocate the establishment of this or any other kind of global tax."

Text of letter from Assistant Secretary of State for International Organization Affairs David Welch to UNDP Administrator Mark Malloch Brown

July 16, 1999

Mr. Mark Malloch Brown
Administrator
United Nations Development Programme
One United Nations Plaza
New York, NY 10017

Dear Mark,

It has been brought to my attention that the United Nations Development Program has recommended the adoption of a global Internet tax to finance development assistance as reflected in the 1999 Human Development Report.

We in the U.S. government are fundamentally opposed to such a recommendation. U.S. law expressly bars voluntary contributions to the UN (including the UNDP) should it seek to implement such a proposal. In addition, the overall concept of taxation for other than domestic purposes runs counter to the sentiments of the vast majority of our citizens and the traditions of the United States.

I have noted your public statement in explanation of UNDP's position with respect to the Human Development Report. It would be useful to hear your views directly in view of the sensitivity of this issue for the United States.

I appreciate your having taken action publicly to set the record straight and look forward to your response.

Sincerely,

(signed)
C. David Welch

Text of letter from UNDP Administrator Mark Malloch Brown to Assistant Secretary of State for International Organization Affairs David Welch

16 July 1999

Dear David,

This is an immediate response to your letter concerning the reference to a "bit tax" on the use of the Internet in the 1999 Human Development Report. I thank you for giving me the opportunity to clarify our position on this issue.

First, I can state unequivocally that the proposal is not a UNDP proposal. UNDP does not advocate and will never advocate the establishment of this or any other kind of global tax.

Second, as indicated in my press statement of July 14th, the 1999 Human Development Report commissioned by UNDP is an independent publication with editorial policies separate from those of UNDP. None of the ideas or recommendations contained in the Report reflects the policies and views of UNDP, its Executive Board or its Member States. None of the proposals contained in this report is binding in any way.

Third, let me convey to you my own personal views on this matter. I consider the idea of a global tax on Internet usage to be completely incompatible with the open character of the Internet and with its enormous potential as a tool for progress. I have made my views on this subject crystal clear to all those associated with the preparation of the Human Development Report. I intend to conduct a thorough review of the editorial process involved in the preparation of this report.

I thank you once again, David, for giving me the opportunity to restate the policies of the UN Development Programme on the issue of global taxes and to convey my own personal views on this important subject. If you have any other questions you would like to raise about this or any other issue, please do not hesitate to get in touch with me directly.

Yours Sincerely,

(signed)
Mark Malloch Brown
Administrator

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