Press release from Addis Ababa:
New research comparing tax policies in Indonesia, South Africa and Brazil has revealed how national tax policies reinforce inequality, and how the broken international tax system is amplifying the problem. A new report ´Cross-country research on tax policy and inequality: A Comparative study of Indonesia, South Africa and Brazil’ produced by CSO networks International NGO Forum on Indonesian Development (INFID, Indonesia) and South African Network on Inequality (SANI, South Africa) shows clearly what tax policies are regressive and failing to deliver sufficient funding for good quality public services.
While Indonesia, South Africa and Brazil are developing countries with recent strong economic growth, this has been accompanied by severe inequality.
“Regressive tax policies in Indonesia, South Africa and Brazil has meant that these countries’ poor are paying proportionately more taxes than rich people. The tax burden on middle class workers is bigger than the one placed on industry, holding back these countries’ tax collection potential that would provide important funding for universal and better quality public health and education services. This is totally unfair and unsustainable in the long term”, says Yustinus Prastowo, one of the co-authors of the study.
The study concludes that Indonesia, South Africa, and Brazil rank among the very top of the world’s nations who are suffering massive tax evasion as a result of international taxation loopholes, which often favour the most wealthy and multinational corporations.
Denise Dube, Acting Tax Justice and Extractives Officer for SANI/Economic Justice Network said “The Addis Financing for Development conference is a crucial opportunity to correct an outdated international financial system, which has put the world on a path of poverty, escalating inequality, and caused years of austerity. The international tax system is broken and unfair. We are living in an ever-more globalized world, where the mutually reinforcing connections between local elites and global elites must be addressed. We call on the States gathering in Addis to commit to go further than the current G20 /OECD-led international tax reform and support UN-led global tax reform where developing countries can participate and have their interests heard on an equal footing.”
“These three countries can play an important role, as part of the G77+China Group, to urge the establishment of an international tax body. They should help to guarantee broader participation of all countries in tax justice,which will not only help to solve the tax problem in their countries, but also benefit all developing countries” said Siti Khoirun Nikmah, another co-author of the study.
The report will be launched on July 12, 2015 during the CSO Forum that precedes the UN Third Conference on Financing for Development in Addis Ababa.
Sue Rooks, Oxfam International Media Officer at firstname.lastname@example.org
Notes to Editors
Interviews with the report co-authors Siti Khoirum Nikmah, NGO Forum on Indonesian Development (INFID) and Yustinus Prastowo, INFID may be arranged following the launch at the side event entitled “Working track on Tax Justice & DRM” at the Hotel Deselegn, during the FFD3 CSO Forum, on Sunday July 12, 2015.
CSO networks International (INFID, Indonesia) and South African Network on Inequality (SANI, South Africa) are part of the “Empowering CSO Networks in an Unequal Multi-Polar World” programme.
The study may be found at http://csnbricsam.org/tax-policy-and-inequalitycomparative-study/
The 3rd UN Conference on Financing for Development (FFD3) will be take place on July 13-16, 2015 in Addis Ababa, Ethiopia. This conference will be attended by delegations from governments, private sector, and hundreds of civil society activists. The conference outcome will influence the adoption of global post-2015 development agenda. It is hoped that the outcome will support momentum to correct the international financial system that has thus far failed to eradicate global poverty and reduce inequality.