ASIA DAYS OF ACTION FOR TAX JUSTICE
18-22 SEPTEMBER 2023
Our Urgent Call for Tax Justice:
Tax the Rich, Not the Poor!
End Inequalities in Global Tax Rules and Rulemaking!
In a world marked by escalating crises, worsening inequalities, austerity, and failures of fiscal and tax systems, this year’s Asia Days of Action for Tax Justice is a resounding call to address the pressing global challenges that have disproportionately impacted the peoples of the Global South, particularly in Asia. The next few days will underscore the critical need to prioritize the needs and rights of people and the planet and the urgency of reforming our national and global tax systems.
We aim to highlight the fundamental role of progressive taxation, wealth redistribution, and reforms in the global tax system as essential tools in tackling the multifaceted crises we face. We will expose the role that regressive tax policies, rampant tax abuses by corporations and the elite, and a broken international tax system play in the accumulation and concentration of wealth in the hands of a few, and in the historical and continuing transfer of wealth from the Global South to the North.
At its core, this initiative advocates for:
● Tax the Rich, Not the Poor!
● Wealth Tax Now!
● End unjust tax burdens on the People!
● End elite and gender biases in tax systems!
● Stop corporate tax abuses!
● End inequalities in global tax rules and rulemaking! UN Tax Convention Now! UN Tax Body Now!
We call on governments and the international community to advance progressive tax reforms and end inequalities in global tax rules and rulemaking. We reiterate our call to reject the OECD-G20 “Tax Deal of the Rich,” the Inclusive Framework on Base Erosion and Profit Shifting (BEPS) and to pursue decisive steps to realize a UN Tax Convention and UN Tax Body where all countries negotiate on equal footing. These are necessary measures toward ensuring that all nations have a voice in international tax reform efforts and in ending inequalities in global tax rules and rulemaking. These are crucial steps toward fixing our global tax system and plugging the leaks of corporate tax abuses and other types of illicit financial flows that drain our economies and deprive people across the world of essential rights and services.
In advancing our just demands for progressive taxation and reforms of the global tax system during the Asia Days of Action for Tax Justice, we highlight the solidarity of the tax justice movement in Asia as a beacon of hope in the pursuit of a just and equitable world where public resources serve the common good.
Goals and Outputs of Asia Days of Action Activities
1. Seeks to raise awareness of the multiple crises and to highlight the role that tax systems play in exacerbating the multiple crises and the need to transform them.
2. Advocate for reforms in national and global systems to end elite and gender biases and end inequalities in global tax rules.
Some Key Activities:
● Online Forum, “UN Tax Convention Now: An Urgent Call for Tax Justice
22 September 2023
The state of tax justice in Asia and the road to a UN Tax Convention will be discussed in an online forum jointly organized by Tax and Fiscal Justice Asia and Tax Justice Network. The forum will look at how offshore tax evasion and other tax abuses by corporations and individuals are affecting the lives of people in Asia. It also aims to amplify civil society demands for tax justice and a more democratic and inclusive global tax body under the auspices of the United Nations.
● An Open Letter to Governments and the International Community, and sign on statement.
The Asian Peoples’ Movement on Debt and Development (APMDD), a member of TAFJA, will release an Open Letter and sign-on statement on the 18th of September to kick off the Asia Days of Action for Tax Justice.
● Country activities and social media campaigns, 18-22 September.
TAFJA members and partners are enjoined to participate in a social media campaign and in country activities in Nepal, Pakistan and the Philippines to deliver our urgent messages to governments in Asia, the Global South, and around the world.
IMF, Hands Off Sri Lanka!
WE CONDEMN the strongarm tactics deployed by the International Monetary Fund (IMF) to force Sri Lanka to cooperate with the OECD’s illegitimate Base Erosion and Profit Shifting (BEPS) framework. We stand with the people of Sri Lanka in opposing the IMF’s oppressive “bailout,” and we uphold their sovereign right to impose taxes where profits are made from the operations and assets of all corporations within its borders.
IMF pressure comes in the midst of sharply unequal debt restructuring negotiations, with Sri Lanka subjected to the Fund’s lending program conditionalities attached to its latest $2.9 billion loan. These include cutting salaries of the public sector, eliminating subsidies without providing safety nets, increasing regressive taxes, and the use of the Employees’ Provident Fund (EPF) for local debt restructuring. These measures will deepen the severe economic difficulties faced by the Sri Lankan people today. At the same time, the IMF is pressuring Sri Lanka to drop a key measure for revenue mobilization when it is urgently needed, which is to slap digital services taxes on tech giants registered in rich countries or in tax havens.
In 2021, Sri Lanka, along with Pakistan, Kenya, and Nigeria, rejected the Two-Pillar solution offered by the OECD’s Inclusive Framework on Base Erosion and Profit Shifting. They are right to do so. We have long pointed out that the BEPS framework amounts to nothing more than a Tax Deal for the Rich, and reinforces the structural disadvantages faced by the Global South within the current global tax and fiscal architecture.
Pillar One of the OECD’s BEPS framework hands taxation rights on excess and non-routine profits over to countries where multinational corporations are headquartered, not in countries where their assets and operations are actually located. This puts Global South countries at a disadvantage, locking them out of raising revenues from wealth located and generated from within their own borders.
Pillar Two of the BEPS framework seeks to set a minimum global corporate income tax (CIT) rate of 15%, a rate far lower than Sri Lanka’s current 30% CIT rate. This would put pressure on Sri Lanka and other Global South countries to race against each other to reach the OECD’s 15% mark, shrinking much-needed revenues in favor of multinationals and large corporate entities.
The OECD and G20 are exclusive clubs dominated by the agenda and interests of the world’s richest economies. They have no business setting global tax and fiscal standards;their interests run fundamentally at odds with the needs and rights of countries and peoples of the Global South, most especially Sri Lanka, a country struggling to overcome an immense economic and social crisis.
A history of flawed fiscal and tax policies contributed to producing the current crisis in Sri Lanka. According to a 2017 report by the International Centre for Tax and Development, the massive contraction of tax revenues across decades is the result in no small part of policymakers’ deliberate decision to whittle down taxes and favor corporate interests through tax cuts and incentives. The Tax Justice Network reports that Sri Lanka’s tax lost to tax havens each year amounts to $403,204,598, of which $397 million are lost to global tax abuse committed by multinational corporations. The total amount of lost tax is equivalent to 27.63% of the health budget and 19.98% of education spending. Furthermore, systemic corruption on the part of the country’s elite have contributed to massive illicit financial flows out of the country and into tax havens, as exposed by the Pandora Papers. This has contributed to a highly unequal distribution of wealth in Sri Lanka, where the richest 10% hoarded 30.8% of the country’s income share prior to the COVID-19 pandemic, leaving the bottom 10% with just 3.1% of income share.
THE IMF AGAIN lays bare where its interests really lie -- neither in helping the Sri Lankan people back on their feet again nor in building a self-reliant economy for Sri Lanka. It wields taxation, borrowings and conditionality as weapons to shape economies and finance along neoliberal lines by privileging corporations and the ultra-rich while passing on the burden of revenue mobilization to the mass of working people through indirect taxes. The Sri Lankan government has already raised power tariffs and income taxes for professionals, and is furthermore planning to make use of workers’ deposits into the country’s public social security institution, the Employees’ Provident Fund (EPF), as part of its attempts to meet IMF loan conditionalities. These harsh austerity impositions have been justly met with protests and strikes by Sri Lankan workers.
Conditions are rife with opportunities for the Sri Lankan government to resist the OECD, the IMF and other global rule-makers that impinge on the sovereign taxing rights of the Sri Lankan people. Hiking income taxes should fall heavily on corporations and wealthy individuals, and not ordinary citizens and employees. Raising VAT only deepens inequalities, as this eats up a bigger share of already reduced incomes of the general population, women who are often in low paid service sectors. The clearest expression of resistance to the impunity of the IMF and the OECD is to shift the burden of taxation equitably through progressive tax policies that target the profits and assets of the richest individuals and corporations, such as through a wealth tax, and plug the loopholes that enable illicit financial flows and the continued looting of the people’s purse.
Advancing progressive taxation is a vital step towards comprehensively reforming a global tax system and financial architecture that enables illicit financial flows and wealth hoarding by corporations and elites, and encourages increasingly bigger shares of revenues to be spent on debt servicing rather than peoples’ needs. We need a UN Tax Convention that is responsive to the needs and interests of all countries, especially those in the Global South who for a very long time have borne the brunt of a flawed global tax system. We need a UN Tax Body that secures the right of countries to tax assets, entities, and transactions within their borders in order to guarantee their citizens’ rights to public services and a just transition to green energy.
Sri Lanka and many other Global South countries in the grip of IMF lending programs and conditionalities also need a multilateral, transparent and inclusive debt resolution mechanism where borrowing governments, and not only lenders have a seat at the table and where public debt matters are discussed democratically, and not in the narrow, opaque corridors of the Fund and other lending institutions.
The OECD’s BEPS framework has already lost ground last year to a Global South-led UN General Assembly resolution to convoke a UN Tax Convention in the near future. The upcoming Convention cannot be allowed to be used as an opportunity to sneak the OECD’s Two-Pillar solution of the BEPS framework into the work of the UN Tax Body.
WE CALL on the Sri Lankan government not to give in to pressure from the IMF to back the OECD’s BEPS framework and to implement austerity measures. It must put its people and their rights first and heed their demands for progressive tax and fiscal reforms. Priority agenda should be rebuilding towards a just, equitable and sustainable economy, moving away from economic paradigms and policies that have only spelled disaster for the people and the entire country.
WE STAND in solidarity with the people of Sri Lanka whom the IMF has brought to this very point of vulnerability and misery after 16 lending programs since 1965. We are one with their struggles in demanding fiscal justice and asserting long-term, durable solutions to deepening, impoverishment and inequality.
12 August 2023
Asian Peoples’ Movement on Debt and Development (APMDD)
Centre for Environmental Justice (CEJ), Sri Lanka
South Asia Alliance for Poverty Eradication (SAAPE)
South Asia Just Transition Alliance
Migrant Forum in Asia (MFA)
Focus on the Global South
Bangladesh Krishok Federation
COAST Foundation, Bangladesh.
Mines, Minerals & People, India
National Hawker Federation, India
All India Women Hawker Federation, India
Civil Society Women Organization, India
Indian Social Action Forum - INSAF
Environics Trust, India
Himalaya Niti Abhiyan, India
People for Himalayan Development, India
Aksi! for Gender, Social and Ecological Justice, Indonesia
Monitoring Sustainability of Globalisation (MSN), Malaysia
TAFJA, Nepal, Kathmandu, Nepal
All Nepal Peasants Peasants Federation, Nepal
Tax and Fiscal Justice Alliance, Nepal
National Alliance of Right To Food Network, Nepal
Food Sovereignty and Climate Justice Forum, Nepal
Youth Peasants Organization, Nepal
Woman Peasants Association, Nepal
Nepal Agriculture Labour Association
Dalits and Landless Peasants Organisation, Nepal
Pakistan Fisherfolk Forum
Pakistan Kissan Rabita Committee
All Pakistan Workers Confederation
All Pakistan Carpet Workers Union
All Pakistan Textile Workers Union
Pakistan Bhatta Mazdoor Union
Progressive Labour Federation - Pakistan
Climate Watch Pakistan
Tameer e Nou Women Workers Organization - Pakistan
Sawera Foundation - Pakistan
Cholistan Development Council Pakistan
Home Net - Pakistan
South Asia Partnership Pakistan
Pakistan Kissan Kerkeela
Labour Education Foundation
Sawera Foundation - Pakistan
Cholistan Development Council Pakistan
Home Net - Pakistan
South Asia Partnership Pakistan
Oriang Women’s Movement, Philippines
Freedom From Debt Coalition, Philippines
Climate Watch Thailand, Thailand
Women's Alliance for Climate Justice, Thailand
Forests and Farmers Foundation, Thailand
Thai NGO Committee on Agrarian Reforms and Rural Development, Thailand
Download the PDF here: Issue Brief Wealth Tax and Gender Justice
WEALTH AND INCOME INEQUALITY IN ASIA
Inequality in many countries in Asia persists as a social ill that requires immediate and sustainable solutions. Though the region saw a decrease in income inequality from 1993-2019, the level of income inequality continues to be almost twice the level in OECD countries (OECD, 2020). Furthermore, it was found that from the same period (1993-2019), inequality within countries such as India increased significantly (Li, 2020). In Asia, the Philippines continues to have the highest level of income inequality while income inequality rose in Indonesia in 2019 (OECD, 2020).
The COVID-19 pandemic only exacerbated an already broken economic system which prioritizes the wealth and profit of a few billionaires versus the lives and livelihoods of the people. In Asia, billionaire wealth grew during the pandemic by USD1.46 trillion while 147 million people lost their (full-time) jobs, the income of informal and migrant workers fell by 21.6%, and millions of girls were forced to drop out of school (Behar, 2022; Lee-Koo, 2021).
Inequality in Asia grew to outrageous and unjust levels where the “wealthiest 1 percent owned more wealth than the bottom 90 percent” (Behar, 2022). This wealth owned by the 1% often come in the form of land, real estate, stocks and bonds, and other assets that continuously generate massive amounts of passive income for their owners. Other assets owned by billionaires are also hidden in the form of cars, boats, paintings, and other tangible assets.
While the billionaires in Asia continue to amass the wealth of the region, its women, children, and laborers continue to face exploitation. Women, children, and workers in Asia who labor to generate profit and wealth for the wealthiest 1% face hunger and destitution. In 2020, Asia Pacific saw an increase of 54 million people who faced hunger, driving the total of Asia’s hungry to more than 375 million. Furthermore, 1.8 billion people in Asia Pacific do not have access to healthy diets and proper nutrition (UNICEF, 2021), while 40% do not have access to healthcare and 60% are not covered by social protection (Global Call to Action Against Poverty, 2022). Income and wealth inequality is a social, political, economic, and cultural issue which require just and sustainable solutions.
GENDER AND INEQUALITY IN ASIA
Women carry the burden of extreme poverty and inequality in Asia. Patriarchal social norms and beliefs that view women secondary beings subordinate to men continue to produce and reproduce unequal gender power relations. This systemic inequality makes women a target for gender-based violence and other forms of discrimination in formal and informal institutions. This also intersects with other inequalities such that economic inequality is a gendered phenomenon, with an over representation of women living in impoverished communities. Women are paid far less than their male counterparts and whatever resources are made available to the working class are first made available to men. The needs of women are also often unmet in the workplace, in communities, and other institutions as decision-making are generally within the purview of men who have little to no interest in meeting such needs. Institutional, cultural, political, economic, and religious barriers to accessing resources pose a serious threat to the economic security of women, despite being custodians and providers of such resources (food, water, health, and education), making them more vulnerable to violence and abuse.
The value of women’s reproductive labor remains invisible in public policy despite overwhelming estimates that illustrate its massive subsidy to the world economy. OXFAM has dubbed care work as “the most valuable industry in the world” (OXFAM International, n.d.), which is valued at USD10.8 trillion if considered at minimum wage. Despite this, very few underfunded services are afforded to women to support them in their care work and access to such services have diminished since the pandemic.
WEALTH TAX FOR GENDER EQUALITY IN ASIA
It is against this reality where a wealth tax should become an immediate and sustainable initiative to fight gender inequality in Asia. A wealth tax can harness taxation’s potential to redistribute wealth and raise badly needed resources to finance public services, social infrastructures and other support systems and measures that are urgently needed to fulfill women’s rights and needs, deliver gender justice, and reduce inequalities. Extreme poverty and inequality have become an unjust reality in a world where a handful of billionaires control the wealth and resources of a nation. In a patriarchal world, women are among the first to suffer from poverty and inequality. Women also carry the burden of creating such wealth as their labor are continuously exploited for the benefit of the few.
In INDIA, 5% of its richest citizens owned 60% of the country’s wealth from 2020-2022. Their wealth grew by 121%. Unsurprisingly, the healthcare industry hosted 32 of the 166 billionaires in India in 2022, making it the top industry with the most billionaires (Fortune India, 2023). Amidst this growth in wealth in India and its healthcare industry, over 1 million women lost access to reproductive health such as abortion and contraceptives within a span of 6 months in 2020 (Buckshee, 2021). Taxing India’s billionaires at a rate of 5% can “cover the entire cost of tribal healthcare (in India) for five years” (Jha, 2023), which can allow indigenous women access to maternal and reproductive care.
Such increase in billionaire wealth also did nothing to save the jobs of women in India. At the start of the pandemic, 47% of women in India also lost their jobs (compared with 7% of men). Women working in the informal sector in India also represented 80% of job losses (UN women, 2021).
INDONESIA saw the wealth of 15 of its billionaires grow at the start of the pandemic. Its wealthiest billionaire increased his wealth by 27% by June, 2020 (Rustandi, 2020). Meanwhile, women’s income and working hours saw a deep decline in Indonesia. In restaurants and hotels, women’s working hours were cut by 50% (compared with 35% of men) (The Jakarta Post, 2020). Women also suffered from the reduced income of micro, small, and medium enterprises (MSMEs), owning more than 50% of such establishments (Hidayahtulloh, 2021; The Jakarta Post, 2020).
In the PHILIPPINES, billionaire wealth increased by 30% during the pandemic (Rivas, 2021) while women’s access to health, education, and livelihood decreased and cases of gender-based violence increased. A survey found that almost 71% of women in the Philippines reported their education as among the most impacted by the pandemic (Khullar, 2021).
What this tells us is that a lot of the economic impact of COVID-19 on women and impoverished communities, the people, and the planet was devastating BUT could have been prevented or mitigated. It tells us that so many lives could have been saved if public services had been adequately financed, available and accessible to all, and responsive to the needs of women and marginalized communities and if wealth had been equitably distributed so that majority of the people were equipped to deal with health, economic, and other crises. It tells us that there is, in fact, enough wealth in the world to ensure decent lives and livelihoods for ALL people.
Establishing a wealth tax is, first and foremost, an essential step towards ending the regressive character of tax systems that are biased towards protecting the interests of corporations and individual elites. Secondly, a wealth tax can generate much needed revenues for financing essential services and other measures needed to address inequality, deliver gender justice as and other urgent actions to address the multiple crises, and build inclusive and sustainable societies. Thirdly, a wealth tax combined with other progressive reforms in fiscal and tax systems, can help end austerity and boost public spending, and help realize wealth redistribution and economic justice. Billionaires should not have access to excessive amounts of wealth in the first place, and it is an unjust economic system powered by capitalist and patriarchal institutions that allows them to have so much wealth. It is the same unjust economic system that allows women, children, and workers to be exploited for the sake of generating wealth for the 1%.
Women want wealth tax now!