The Member States of the United Nations General Assembly should uphold tax justice to overcome the COVID-induced crisis!
Several months after the global outbreak of the COVID-19 pandemic, millions of people across the world, especially in the Global South, are still suffering from the resulting multiple and intersecting crises – economic, health, social, and environmental – that continues to assail all aspects of human lives. For the poorest and most vulnerable, who have been hardest hit by the crises’ devastating impacts, each day is a struggle for survival. Their future remains insecure as policy responses are shaping up to be unresponsive to the rights of the people and gender dimensions of the crises.
Today, the member states of the United Nations open its 75th General Assembly under the theme – “the future we want, the United Nations we need: reaffirming our collective commitment to multilateralism – confronting COVID-19 through effective multilateral action”. Multilateralism was in a crisis when the pandemic broke out. However, the multiple crises at a global scale cannot be addressed without cooperation and inclusive multilateralism. It is time to respect and implement the imperative of “common but differentiated responsibilities” principle in addressing all aspects of the health, economic, and climate crises that we are facing.
We urge governments to move away from the same policy measures that prevented us from effectively arresting the health emergency and its ensuing multiple crises. The austerity measures in place in most countries before the outbreak of the pandemic left basic public services underfunded. Continuing with these measures during this time will disproportionately harm those who are most severely affected. This is the time when social spending should be expanding.
At the same time, we call on governments to stop debt-dependent and corporate-driven policy responses to the COVID-19 pandemic and its impacts. Instead, governments should uphold tax justice to be able to finance the expanded social spending needed to overcome the pandemic-induced crises. Through progressive tax measures, governments can mobilize resources domestically by making multinational corporations and the wealthy elites pay their share of taxes and reducing the unfair tax burdens on the poor. Furthermore, governments have the possibility of increasing their tax take by rigorously curtailing tax dodging, by closing loopholes that lead to resource leakages, and by targeting those making huge profit from and in the crisis.
While enhancing domestic revenue mobilisation at the national level, governments should act collectively and urgently at the international level to stop profit shifting, illicit financial flows, and race-to-the-bottom in corporate taxation because these are challenges that nation-states cannot solve individually. Unless this global challenge is addressed collectively, the efforts of nation-states to enhance domestic revenue mobilisation will remain inadequate.
At a time when the whole world is enduring multiple crises of a great magnitude, it is not the time to lower ambitions, to indulge in rhetoric, and reduce objectives to attain “low hanging fruits”. It is rather time to aspire for bold and ambitious goals and to address structural and root causes of problems. In this context, we echo and reiterate the call of the Civil Society FfD Group to pursue systemic solutions to fix the broken global economic and financial architecture.
It is time to push for the establishment of a universal intergovernmental UN tax commission and the formulation of a UN Tax Convention to address tax havens, tax abuse by multinational corporations and other illicit financial flows. Democratizing the global tax governance system where countries have an equal footing in writing the global tax rules is the first step in reforming the international tax system.
Overcoming the multiple crises and building a future that we want – a future that is just and sustainable – will not be possible without tax justice. Now, more than ever, is the time to prioritise the future and wellbeing of the people, especially the vulnerable and the marginalised, over profits and corporate greed.