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UN: tax and talking shops

25 September 2013   (0 Comments)
Posted by: Author: Sameer Dossani (ActionAid)
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Author: Sameer Dossani (ActionAid)

Stamping out tax avoidance must be a key part of plans to fight poverty after the Millennium Development Goals expire. This should be high on the agenda at this week’s UN General Assembly meeting.

This week sees world leaders gather in New York for the United Nations General Assembly meeting, with fighting poverty high on the agenda. Development takes a back seat to political posturing at these events, but leaders will have some discussion on what will replace the Millennium Development Goals when they expire in 2015.

Any new global framework must not repeat the mistakes of the past. It’s particularly important that demands from the Global South for reform of the international tax system and alternative economic models are on the agenda. 

A number of different processes – government negotiations and civil society consultations – all feed into the post-2015 framework. Every development topic you can think of – aid, women’s rights, climate change, the rights of people with disabilities, and so on – is being discussed by one or more of these processes. But so far the messages have been uninspiring. 

And whilst our leaders keep talking, inequality is increasing almost everywhere in the world with dire results. 

As global wealth remains in the hands of a few, the chances for living in a decent society diminish, and dangers related to war, climate change, and a host of other issues remain unaddressed.

So what should a new anti-poverty framework look like? 

There’s been a lot of talk about the private sector investing in development and the changes this could bring. But discussions often ignore that many corporations aren’t paying their fair share of tax, effectively diverting billions of dollars from governments who need it into the hands of a few wealthy investors.

Current estimates show that developing countries lose as much as US$300bn to tax dodging and tax deals globally every year. That’s twice the amount that poor countries receive in aid and more than enough to guarantee that everyone on the planet has access to health care and gets a primary education. 

If the private sector wants to be part of the solution, it must acknowledge that corporations are a big part of the problem. 

A first step would be for companies to pay their fair share of tax and for governments to close the loopholes that these companies exploit. But raising money through better tax policies is not enough. Tax money needs to be invested in real solutions. 

Past mistakes include slashing budgets for public services in the name of austerity, privatising government assets and services, and following failed liberalisation policies. 

There are alternatives. But they will vary from country to country. There’s no one-size-fits-all solution when it comes to defining trade, investment and development policies. But the principle underlying those policies should be that human rights come first. And building on that principle, we can begin to think through what some policy solutions would look like. 

By investing in women smallholder farmers and others working towards sustainable agriculture, we can ensure that everyone has enough to eat. We also need to invest in education, health care and employment for all. And we can do this by opening up trade or limiting it, so that we can build up domestic industry. 

If leaders can break with the past and begin outlining a post 2015 framework that moves towards a more equal global society, they will have a good result. If not, this is just another UN talk shop searching for a purpose. 

This article first appeared in publicfinanceinternational.org


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