Can taxation be the answer?
Over the past twenty years we have heard constantly that the world has the resources to address global development challenges such as poverty, environmental degradation, diseases and inequalities. However, despite the resources “being there” human development plans have been consistently underfunded.
Clearly, existing “trickle-down” and redistribution mechanisms are not being effective and will be woefully inadequate to fund the implementation of the universal SDGs agenda.
In this context, the reference on the need to strengthen domestic taxation systems in the FfD3 Element Paper is good news. A progressive and fair taxation system provides Governments with long term, predictable and sustainable resources for nationally owned development plans and priorities. Moreover, effective taxation systems increase Government’s accountability to citizens while empowering Parliamentarians to perform the critical role of budgetary oversight. Last but not least, well functioning taxation systems put an end to aid dependency and increase political space for national decision-making.
While national taxation is critical, the post 2015 universal and transformative agenda requires global taxation mechanisms, as it is based on the shared responsibilities among countries but with the understanding that those who have contributed more to the problems should contribute more.
Happily the FfD3 Elements Paper mentions (although too vaguely and timidly) global tax mechanisms and concrete proposals such as a financial transaction tax (building on the European Union pilot and on the consensus that the financial system should contribute to global public good) and a carbon tax (building on the consensus that CO2 emission should be discouraged and taxed).
Let us hope that the negotiations of the first universal and transformative agenda will also foster taxation mechanisms (at the national and international levels) conducive to the achievement of the Sustainable Development Goals.
By Marina Ponti, Social Watch.