In part due to unreliable corporate tax revenue, developing countries have been more and more dependent on taxes that disproportionately affect poorer people, such as consumption taxes (e.g. VAT). We strongly believe that if countries are serious not only about raising tax revenue, but also about tackling economic inequalities, they need to shift to more progressive tax systems where those more able to pay are those who contribute more.
At ActionAid we have also done a lot of work to raise awareness and support campaigning on tax justice as a way to ensure sustainable financing of free, quality public education. Globally, there are 264 million primary and secondary age children and youth out of school, of which girls make the majority. A key way to raise extra resources is to eliminate harmful tax breaks and unfair treaties.
Global scandals such as the Panama Papers and more recently the Paradise Papers have revealed the outrageous scale of global tax avoidance and use of tax havens by the super rich and global companies. Our research has also uncovered the massive scale of losses to harmful tax breaks and unfair tax treaties, which reduce the tax that some of the world’s poorest countries can collect from multinational companies.
In many developing and developed countries citizens have been raising their voices for more fair and effective tax rules that promote equality and raise funds needed to pay for education, health care and other key public services.
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