The world has changed in many complex ways in the last few years, and the COVID pandemic brought the most seismic shift. It added to a context of a rapid acceleration towards multiple collapses: climate disasters, wars, a new wave of debt crisis that has been pushing governments to implement austerity measures and hold investments in vital social infrastructure. But through all of these changes, much has remained the same, particularly in whose interests the current economic structures and governance work in favour of, who they serve and at whose expense, pointed out Âurea Mouzinho, global policy advocacy and campaigns coordinator of the Global Alliance for Tax Justice (GATJ), in her opening remarks during the launch event of the campaign Tax Justice for Women’s Rights, last Monday (6 March). “Very few situations make this more apparent than the simultaneous explosion of wealth for the ultra rich, at the same time that millions around the world face deteriorating conditions,” she highlighted.
According to the latest Oxfam report, the richest one percent have captured almost two-thirds of all new wealth. At the same time, poverty has increased for the first time in 25 years. Statistics like these demonstrate the structural inequalities which characterise the current global economic system. “Across the world it is women who disproportionately bear the brunt of these unjust tax policies through several and intersecting layers of injustice,” Mouzinho underscored in her presentation. The same Oxfam study shows that, as of 2020, 252 men held as much wealth as one billion women and girls in Africa and Latin America and the Caribbean.
In response, there is a growing consciousness around matters of tax justice and the role it plays in delivering gender justice. The 7th edition of the Global Days of Action on Tax Justice for Women’s Rights – initiative of GATJ, together with its members and partner organisations – calls for progressive tax reforms in wealth taxation to advance women’s rights and gender equality. Moderated by Nana Ama Sarfo, contributing editor from Tax Notes, the launch event of the campaign brought together tax justice advocates from GATJ’s regional networks to demand for the expansion of wealth taxes to finance public services and achieve the goal of gender equality.
Watch the launch event of the GDOA on Tax Justice for Women’s Rights 2023:
Wealth taxes can work for women’s rights in many ways
The discussion took on the critical fault lines that exist in the nexus of tax justice and gender justice with examples of how wealth taxes could be used to address inequality and achieve gender justice. Speakers underlined the urgency to eliminate explicit and implicit biases against women of tax systems, as well as review current policies that prioritise revenue collection through indirect taxes and taxation on the informal sector.
“Latin America is one of the most unequal continents of the world. The low tax collection and a clear overreliance on indirect taxation hinder any possibility of reducing gender inequalities,” said Verónica Serafini, economist at Red de Justicia Fiscal de América Latina y el Caribe (RJFALC) and Latindadd, during her participation in the event. She explained that regressive taxation, combined with the debt crisis and implementation of austerity measures, result in a lack of resources to invest in essential public services and policies to fulfil women’s rights and enable them to achieve economic independence. “Wealth taxes are important in the region for many reasons. Besides being an opportunity to change the extractivist economic growth logic, which does not benefit women, and to finance vital public policies for women, such taxes could enable us to confront debt, which deepened during the pandemic,” explained Serafini.
Although the discussion about wealth taxes has gained the spotlight in Latin America, the region still has a long way to go, according to Serafini. And this is also a reality in Africa and Asia. Chenai Mukumba, acting executive director of Tax Justice Network Africa, who also integrated the panel discussion, said that few African countries employ wealth taxes, and the few that do, make it a marginal contribution to the overall treasury budget. “Only recently we started seeing more policy makers recognising wealth taxes as an important tool to address inequality as a whole, and the broader gender inequality question,” Mukumba said, mentioning Kenya and South Africa as countries that indicated to start moving towards this direction. “The extent to which we can get high net worth individuals to contribute more resources that we need to fund key social sectors that women tend to be beneficiaries of, the more progressive our taxation system.”
“Billionaires are getting away with hoarding wealth, including through unscrupulous practices, hiding wealth in tax havens. And yet, as governments face the challenge of falling or inadequate revenues, the first to go in budget spending are public services which women need so urgently,” highlighted Jeannie Manipon, member of the coordination committee of the Tax and Fiscal Justice Asia (TAFJA). She shared that in many countries in the region like Pakistan, the Philippines, Indonesia and India, access to food and water has been severely compromised, not only because of the climate change’s impacts, but also due to the economic policies that erode peoples’ capacities to enjoy their rights and live a life of dignity.
“Wealth taxes can work for women’s rights in many ways. They can raise revenues for increased funding of public services that are vital for women. They can also correct the predominantly regressive character of our tax systems, reducing the need to impose and collect indirect taxes that are burdensome for women and marginalised communities. It is also a way to strengthen the governments’ abilities to address gaps in domestic resource mobilisation,” Manipon concluded.
Linkages between global tax governance and gender justice
A major challenge of taxing wealth is the wall of secrecy around asset ownership at a global scale. “There’s so much that can be done in terms of taxing wealth better at the national level, but at some point we run into the wall that tax systems cannot only be solved from the national level because wealth is getting hidden internationally in tax havens,” explained Tove Maria Ryding, coordinator of Tax Justice-Europe (TJ-E) and tax justice policy and advocacy manager at Eurodadd, in participation in the event. “Wealthy individuals and corporations still hide their wealth in tax havens using either illegal tax evasion or fully legal but secret tax avoidance mechanisms.”
Ryding underlined the importance of bringing discussions and decision-making processes related to tax to the United Nations (UN) as a way to advance tax justice. “For a long time, we have seen a small and powerful group of countries insist on having global tax standards be set at the Organisation for Economic Cooperation and Development (OECD) but countries cannot negotiate on an equal footing there,” she said. For over two decades, developing countries have been calling for an intergovernmental tax negotiation process at the UN, which would allow an democratic and transparent process to reform global tax architecture. In November 2022, the tax justice movement had a big win with the approval of an Africa Group’s proposal for inclusive and effective tax cooperation at the UN.
“In the proposal for a UN Tax Convention that GATJ and Eurodad launched in March last year, we have also pointed to the fact that the international community has already committed to gender equality. By having a UN tax negotiation in the same house where governments committed to the sustainable development goals, we can start linking the international policy-making on tax to the international goals on these issues,” said Ryding.
Increasing tax transparency and closing tax loopholes
Increasing tax transparency and closing tax loopholes are also fundamental measures to advance both tax justice and gender justice. Sofia Gonzalez, policy fellow at the Financial Accountability and Corporate Transparency (FACT) Coalition, shared during her intervention that money laundering and corporate secrecy are big challenges in the United States. “The U.S. has become a gateway for money laundering because there is not a beneficial ownership requirement for non-corporate service providers. Corporate secrecy is another issue: the country is the easiest place to set up an anonymous shell company,” she explained, highlighting the importance of the Corporate Transparency Act (CTA) that the FACT Coalition has been advocating for.
Erika Beauchesne, Communications Coordinator of Canadians for Tax Fairness (C4TF) reflected on the importance of recovering lost revenue from corporate tax avoidance and helping to close tax loopholes. According to a recent report C4TF released this year, in 2021 alone, 123 of Canada’s biggest corporations avoided 30 billion Canadian Dollars in taxes. “These funds could be used to strengthen funding for public services that benefit everybody and are essential for women, such as health care, accessible child care, education, and affordable housing,” she said.
Another C4TF report showed that many large corporations in Canada took pandemic subsidies while avoiding billions in taxes. “They were not only not contributing with their share of taxes but also were taking government’s money that could be used to fund public services for people. Governments can make corporations pay their share by closing tax loopholes and by cracking down on the use of tax havens.”
To learn more about the Global Days of Action on Tax Justice for Women’s Rights 2023 and engage in the campaign, check out the campaign activities.