TAX and FISCAL JUSTICE ASIA (TAFJA)
CSOs support the G77 and China proposal on UN intergovernmental tax body and the Africa Group’s on a UN Tax Convention
This week, the Group of 77 (G77) and China and the Africa Group at the UN have once again tabled resolution drafts, which would bring reform of international tax rules to its rightful institution and enshrine international cooperation in tax matters on the basis of equality and fairness. The Global Alliance for Tax Justice (GATJ) joins other members of the Civil Society Financing for Development (CS FfD) Group in its support for the draft resolutions.
On this occasion, to reinforce its support, GATJ launched a statement endorsing the call of the African Ministers of Finance for a UN Tax Convention. An initiative of the Tax Justice Network Africa (TJNA), in collaboration with the Red de Justicia Fiscal de América Latina y el Caribe (RJFALC) and Tax and Fiscal Justice Asia (TAFJA) – members of GATJ – the statement was signed by 228 civil society organisations worldwide. “The statement reflects the wide support the call for a UN-based and Member States-led intergovernmental process has, as the only inclusive and democratic alternative to reform international tax rules. We are ready to mobilise and raise the pressure on the UN Member States to overcome the blockage of OECD countries and work collaboratively to pass these resolutions”, said Dereje Alemayehu, Executive Coordinator of GATJ.
In support of the resolutions, Luis Moreno, member of RJFALC and Chair of the GATJ’s Coordination Committee said:
“OECD countries have been pursuing a two-pronged approach regarding reform of international tax rules. They have been trying to impose binding reforms that serve mainly their interest at the cost of developing countries, as well as to lock them into agreements that will perpetuate the denial of their international taxing rights. In their first approach, the OECD-led process is failing to reach any conclusion. However, they have so far succeeded in their second approach: blocking the start of an intergovernmental process at the UN. The resolution drafts of the G77 and China and the Africa Group at the UN are first steps to end this blockage. We call on all developing countries, and in particular those in Latin America and the Caribbean, to firmly support these resolutions.”
Alvin Mosioma, Executive Director of TJNA, also reiterated:
“Illicit financial flows and other forms of tax abuse by multinational corporations and wealthy individuals are draining an increasing amount of resources much needed for recovery and development. Developing countries, where the need for resources is greater, are deprived of them. This outflow of resources is multiple times higher than inflows in the form of official development assistance (ODA) and foreign direct investment (FDI).”
“Unless the failures of the international tax system are urgently addressed, developing countries will continue to lose billions of dollars due to illicit financial flows and other forms of tax abuse. This situation has to be brought to an end. The G77 and China and the Africa Group at the UN are leading the way. Developing countries should unite to stop the blockers from thwarting a member state led process.”
Jeannie Manipon, member of the Coordination Committee of TAFJA and GATJ said:
“Besides usurping the role of reforming international tax rules, the G7 has not moved an inch in curbing illicit financial flows (IFF) and reducing tax abuses. There is thus no improvement to expect if tax rule making is left with the G20. Many OECD countries have a big share of the responsibility in tax abuses of all forms because they are the destination of IFF and host of enabler institutions. That is why they are not taking measures to close down tax havens and to sanction enablers of tax dodging and IFF. On the other they are blocking the reform of the global tax system through an inclusive intergovernmental process at the UN to address these challenges.”
“The resolution drafts forwarded by the G77 and the Africa Group at the UN should be endorsed and translated into action urgently. The OECD countries must stop blocking a UN-based inclusive and transparent intergovernmental process to democratise global tax governance in which all countries participate on an equal footing.”
“We call on all G77 countries to withstand the bullying and divide and rule tactics of OECD countries and actively collaborate in their fight for a Member States-led elaboration of a UN Tax Convention, for an improved and equitable international tax cooperation.”
NOTES TO THE EDITORS
- The G77 and China resolution published this week: https://undocs.org/A/C.
- Africa Group resolution published this week: https://undocs.org/A/C.
- Statement by TJNA, RJFALC, TAFJA and GATJ in support of the call by African Ministers of Finance, Planning and Economic Development for a UN Tax Convention: https://
globaltaxjustice.org/ libraries/statement-support- for-the-call-by-african- ministers-of-finance-for-a-un- tax-convention/
- The G77 and China and its members have been calling for a UN intergovernmental tax body for over two decades. This database developed by the CS FfD Group tracks statements by governments supporting this call: https://csoforffd.org/
2021/10/27/database- governments-supporting-an- intergovernmental-un-tax-body- and-or-un-tax-convention/
- Building on the call by G77 and China, in 2019 a call to develop a UN Tax Convention was first put forward by the Africa Group at the United Nations. The following year, it was included in a ‘Menu of Options’ produced as part of a UN process to consider how the international community could respond to the COVID-19 crisis. In February 2021, the FACTI Panel – which had been set up by the President of the UN General Assembly (at the time Nigeria) and the President of the UN Economic and Social Council (at the time Norway) – also included the proposal for a UN Tax Convention as a key recommendation in its final report. In May 2022, the African Ministers of Finance, Planning and Economic Development reiterated the call at their 54th session in Dakar.
- The Global Alliance for Tax Justice (GATJ) and the European Network on Debt and Development (Eurodad) launched in March 2022 a civil society proposal for a UN Tax Convention, which responds to these calls and a number of other concerns that have been raised regarding the existing international tax system: https://
globaltaxjustice.org/news/ ground-breaking-civil-society- proposal-for-a-un-convention- on-tax-is-published/
Support for the call by African Ministers of Finance, Planning and Economic Development for a UN Tax Convention
By Tax Justice Network Africa (TJNA) in association with Tax and Fiscal Justice Asia (TAFJA) and Red de Justicia Fiscal de América Latina y el Caribe (RJFALC), members of the Global Alliance for Tax Justice (GATJ)
Over the past several years, Global South countries have repeatedly called for the establishment of an intergovernmental tax body under the auspices of the United Nations to fix the international tax system and lead the setting of global tax standards. Last month this call was reiterated by the Conference of African Ministers of Finance, Planning and Economic Development.
At the conclusion of the fifty-fourth session that was held on 16 and 17 May 2022, in Dakar, the ministers endorsed the resolutions that had been approved by the Committee of Experts. Under the section on ‘Curbing illicit financial flows and recovery of lost assets’ the resolutions included the following:
"The Conference of Ministers: [...] Calls upon the United Nations to begin negotiations under its auspices on an international convention on tax matters, with the participation of all States members and relevant stakeholders, aimed at eliminating base erosion, profit shifting, tax evasion, including of capital gains tax, and other tax abuses."
The endorsement of this resolution by the African ministers of finance, planning and economic development adds to the voices of developing nations that have long called for an intergovernmental tax negotiation process at the UN. For over two decades, the G77 and China have called for ‘Member States to consider the conversion of the United Nations Committee of Experts on International Cooperation in Tax Matters into an intergovernmental subsidiary body of the Economic and Social Council.’, noting their concern that there is “no global, inclusive norm-setting body for international tax cooperation at the inter-governmental level”. Since then, there have been repeated calls by numerous Global South groups and member states for the same. Most recently, G77 and China reiterated this call at the 2022 FfD Forum with the Africa Group in the UN noting “the urgent need to establish a universal, UN intergovernmental tax body and negotiate a UN Tax Convention to comprehensively address tax havens, tax abuse by multinational corporations and other illicit financial flows through a truly universal, intergovernmental process at the UN, with broad rights holders’ participation.”
In February 2021, the report of the High-Level Panel on International Financial Accountability, Transparency and Integrity for Achieving the 2030 Agenda (FACTI Panel) also called for the international community to initiate a process for a UN Tax Convention.
Illicit financial flows (IFFs) have continued to ravage the world’s economies with developing countries disproportionately suffering the negative effects of the phenomenon, especially in the post-Covid-19 era. The State of Tax Justice 2021 showed that countries are losing a total of $483 billion in tax a year to global tax abuse committed by multinational corporations and wealthy individuals. Despite developing nations being disproportionately affected by tax-related IFFs, they have always been left out of rulemaking processes that could offer solutions to address these challenges.
The negotiation of the new global tax rules currently takes place within the Organisation for Economic Co-operation and Development (OECD) Inclusive Framework (IF). Despite its name, the OECD Inclusive Framework is not truly inclusive as over a third of countries are not members of the platform, not all countries have an equal voice in discussions on the reform of the global tax system, and it carries an inherent bias towards the interests of the members of the OECD. At present only half of all African countries are members of the IF and in the most recent Two-Pillar Solution to Address the Tax Challenges Arising from the Digitalisation of the Economy, only 24 African countries endorsed it, yet it was lauded as a global deal.
Further to this, in a series of recent letters from a group of UN independent experts and special rapporteurs, they expressed concern that Pillar One will ‘will facilitate aggressive tax optimisation strategies and tax evasion’ and Pillar Two will ‘reduce the ability of low and middle-income countries to mobilise sufficient resources to invest in essential public services and to ensure the realisation of human rights’ reiterating the inadequacy of the OECD IF as global rule-making body.
The inadequacy of OECD to set global standards is further revealed in their decisions in tax transparency over the last decade. This includes decisions on the cross-border exchange of information on financial accounts and on the activities of multinational companies that can reveal patterns of tax abuse by individuals and companies, which have been designed in such a way as to systematically exclude lower-income countries from the benefits.
We, therefore, laud the continued efforts of developing countries, and more recently the African ministers, to call for an international convention on tax matters at the United Nations. And even as developing nations continue with these calls, we urge OECD countries whose stance has traditionally been obstructive towards efforts to truly establish a democratic platform for negotiation.
This resolution, if implemented, would move rulemaking on international tax out of the hands of a few rich countries who have determined international tax rules for decades and to the UN. As such, we, the undersigned, support the call of developing countries, and more recently the African ministers, for an international tax convention and an intergovernmental tax body under the auspices of the UN.
A UN tax convention would:
● Promote democratic reforms of the international taxation framework by allowing for genuinely inclusive consultations to ensure that the interests of developing nations are represented.
● Initiate the process of harmonising international tax agreements to eliminate their bias towards developed countries to the detriment of developing countries.
● Foster greater collaboration between governments on tax matters in a fair, transparent and accountable manner. This would also enhance greater coordination and coherence between institutions and ultimately have tax issues administered under one framework.
We, therefore, call upon:
1. Governments from all regions of the Global South to step up South-South cooperation and prioritise their long-standing demand for a universal, intergovernmental tax negotiation process at the UN including articulate express statements of support for the recent call by African ministers for a UN tax convention to build political momentum.
2. Governments from the EU and OECD to recognise that the failures of the current system also defeat their own ability to deliver progressive taxation of income, profits, wealth and capital gains, and to give their support to the start of negotiations on a convention.
3. The Secretary-General of the UN to issue a statement of solidarity with Global South countries and provide steer for a discussion on a UN tax convention at the upcoming 2022 UN General Assembly.
Statement endorsed by:
1. ActionAid International
2. ActionAid Nepal
3. ActionAid Nederland
4. Actionaid Senegal
5. ActionAid Sierra Leone
6. ActionAid Zambia
7. African Forum and Network on Debt and Development (AFRODAD)
8. AGAGES MANAGEMENT CONSULTANTS GRP (Agir pour Garantir la Gouvernance Économique etSociale)
10. Akina Mama wa Afrika
12. Albida International LLC
13. All Nepal Peasants Federation
14. Alliance Nationale des Consommateurs et de l'environnement
15. Alliance Sud, Switzerland
16. Alternative Information & Development Centre
17. Amnesty International
18. Aniban ng mga Manggagawa sa Agrikultura (AMA)
19. Anti-Corruption Commission - Sierra Leone
20. APIT Portugal
21. Asian Peoples' Movement on Debt and Development (APMDD)
22. Asociación Economía Solidaria Riojana
23. Association For Promotion Sustainable Development
24. Association of mineworkers and construction union (AMCU)
25. Attac Austria
26. ATTAC CADTM Burkina
29. Botswana Centre for Public Integrity
30. Bulawayo Vendors and Traders Association
31. Bureau de Liaison avec le Parlement BLP/CENCO
32. CAFAGB(Cellule Associative des Femmes Actives pour la Gouvernance les Droits Humains et le Bien-être)
33. Campaign for Human Rights and Development International CHRDI
34. Catedra Abrieta Plan Fenix Fac. Cs. Económicas UBA Argentina
37. CELLULE ASSOCIATIVE DES FEMMES ACTIVES POUR LA GOUVERNANCE LES DROITS HUMAINS ET LE BIEN ÊTRE
38. Center for Economic and Social Rights
39. Center for Peace Education and Community Development
40. Centre de Formation en Mécanismes de Protection des Droits Humains
41. Centro de Documentación en Derechos Humanos "Segundo Montes Mozo S.J." (CSMM)
42. Centro de Teatro do Oprimido de Maputo
43. Centro Montalvo
44. Chambre Transversale des jeunes entrepreneurs du Burundi
45. Changemaker Finland
46. Christian Aid
47. Church Action for Tax Justice
48. Civil Society FfD Group
49. CIVIL SOCIETY LEGISLATIVE ADVOCACY CENTRE 50. CNCD-11.11.11
51. Coalition for the UN We Need
52. COLMYG de Teusaquillo
53. Congregation of Our Lady of Charity of the Good Shepherd
54. Consumers Association of Penang
55. Corruption and Rights Watch - CORWA
56. Corruption Watch
58. CRASH - Coalition for Research and Action for Social Justice and Human Dignity
59. Croatian Platform for International Citizen Solidarity
63. Education Coalition of Zimbabwe
64. Ekvilib Institute
65. Elimu Yetu Coalition
66. ENVIRONICS TRUST
67. Equidad de Género: Ciudadanía, Trabajo y Familia
68. European Network on Debt and Development (Eurodad)
69. FARMING COMMUNITY EDUCATION TRUST-ZIM
70. Federation of Environmental and Ecological Diversity for Agricultural Revampment and Human Rights, The (FEEDAR & HR)
72. FIAN International
73. Financial Accountability & Corporate Transparency (FACT) Coalition
74. Financial Transparency Coalition
75. Finnish Development NGOs Fingo
76. Focus on the Global South
77. Fundación Constituyente XXI Chile
78. Fundación Mexicana para la Planeación Familiar, A. C. MEXFAM
79. Fundación SES
80. Gender and Development Network (GADN)
81. Generational Citizens In Action
82. Ghana Integrity Initiative
83. Global Alliance for Tax Justice (GATJ)
84. Global Campaign for Education (GCE)
85. Global Policy Forum
86. Global Tax Laboratory
87. GRADE Project, the University of St Andrews
88. Green Economy Coalition
89. Green Governance Zimbabwe Zimbabwe
90. GREEN SCENERY
92. GRUPO NACIONAL DE PRESUPUESTO PÚBLICO
93. Halley Movement Coalition
94. Helping Our People Excel (HOPE)
95. Human Rights Consultative Committee (HRCC)
96. Human Rights Development Initiative
99. Indian Social Action Forum
100. Indonesia for Global Justice (IGJ)
102. Initiative Citoyenne pour l'Environnement et le Développement Durable (ICED)
103. Initiative for Social and Economic Rights (ISER)
104. Innovations for Development (I4DEV)
105. Institute for Economic Justice
106. Institute of Public Finance
107. Instituto Centroamericano de Estudios Fiscales (Icefi)
108. Instituto de Desarrollo de la Economía Asociativa (IDEAC)
109. Instituto de Estudos Socioeconômicos (Inesc)
110. Instituto Justiça Fiscal (IJF)
111. Instituto Popular de Capacitación (IPC)
112. International Women's Rights Action Watch Asia Pacific
113. Jana Adhayan Kendra
114. Jean Marie
115. Justicia Climática Rep. Dominicana
117. Kairos Europe WB
118. Keen and Care Initiative (KCI)
119. Kopin - Malta
121. KULU - Women and Development
122. Kuza Livelihood Improvement Projects
123. Latin American Campaign for the Right to Education (CLADE)
124. LATINDADD - Red Latinoamericana por Justicia Económica y Social
125. Lesotho Council of NGOs
126. Ligue Congolaise de Lutte Contre la Corruption (LICOCO)
127. Local Governance Network (LOGNet)
128. Malawi CSO Led Black Economic Empowerment Movement (MaBLEM)
129. Malawi Economic Justice Network MEJN
130. Manica Youth Assembly
132. Mines mineral and people
133. Missionary Oblates of Mary Immaculate
134. Mzuzu Youth Anti-Corruption Movement
135. Nadi Ghati Morcha
136. National Education Coalition
137. National Society of Conservationists - Friends of the Earth Hungary
138. National Taxpayers Association
139. Nawi Collective
140. Network Movement for Youth and Children's Welfare (NMYCW)
141. Netzwerk Steuergerechtigkeit
142. Norsk Folkehjelp
143. Norwegian Church Aid
144. Norwegian Forum for Development and Environment
145. Observatorio Dominicano de Políticas Públicas
146. Observatorio Sociolaboral y del Diálogo Social en el Ecuador (OSLADE)
148. Oxfam IBIS
149. Pakistan Fisherfolk Forum
150. Pakistan Kissan Rabita Committee _ PKRC
153. Perkumpulan PRAKARSA
155. Public Services International (PSI)
156. Public Services Labor Independent Confederation
157. Red de Justicia Fiscal de América Latina y el Caribe (RJFALC)
158. Red de Organizaciones de Managua
159. Red Dot Foundation
160. Rede de Auditores Fiscais de Língua Portuguesa
161. ReFocus Consulting
162. Religious of the Sacred Heart of Mary NGO
163. RENICC - Red Nicaragüense de Comercio Comunitario
164. Resource Link Foundation
165. Revenue Mobilisation Africa
166. Rural Area Development Programme (RADP)
167. Ruwa Residents & Ratepayers Association Trust
168. Rwanda Education for All Coalition
169. Sahabat Alam Malaysia (Friends of the Earth Malaysia)
170. Salesian Missions, Inc.
171. SAUTI YA WANAWAKE
173. Shule Direct
174. Sisters of Charity Federation
175. Social Support Foundation (SSF) Ghana
176. Social Watch
177. Society for International Development (SID)
178. Somaliland Network on Education For All (SOLNEFA)
179. Southern Africa Mining Workers Movement
180. Southern and Eastern Africa Trade Information and Negotiations Institute
181. Stop the Bleeding Campaign
182. Sudanese Coalition for Education for all
183. Swaziland Network Campaign for Education for All
184. Tanzania Education Network
185. Tax and Fiscal Justice Asia (TAFJA)
187. Tax Justice Coalition Ghana
188. Tax Justice Network
189. Tax Justice Network Africa (TJNA)
190. Tax Justice Norway
193. Teach For Zimbabwe
194. Temple of Understanding
195. The International Union for Land Value Taxation
196. The PRAKARSA
197. Third World Network - Asia
198. Third World Network - Africa
199. ThisAbilityHub Zimbabwe
200. TI Bénin
202. Trade Justice Pilipinas
203. Transparency International - Initiative Madagascar
204. Transparency International Kenya
205. Transparency International Zambia
206. Transparency International Zimbabwe
207. Transparency Mauritius
208. TZ Human Rights Network
210. Union des Amis Socioculturels d'Action en Développement (UNASCAD)
211. Universal Rights Network
216. West Nile Youth Empowerment Centre
217. WomanHealth Philippines
218. Women Aspire Network
219. Women Excel Trust
220. Women First International Fund
221. Women's Working Group on Financing for Development
222. World Basic Income
223. World Economy, Ecology and Development - WEED
224. Youth for Tax Justice Network (YTJN)
225. Zambia Tax Platform
226. Zimbabwe Coalition on Debt and Development (ZIMCODD)
227. Zimbabwe Cross Border Traders Association
228. Zimbabwe Environmental Law Association
Tax Justice Now for People’s Recovery! - TAFJA
Tax justice groups in Asia are calling for a Day of Action on Tax Justice to be staged on September 23 to demand changes and reforms on taxes and fiscal system with Jeannie Manipon of The Asian Peoples’ Movement on Debt and Development (APMDD) saying that “national tax systems are biased in favor of MNCs and the elites. We can also see the similar pattern in the international tax system”, emphasizing that a progressive mechanism must be put in place in order to allow the removal of the backwards tax and fiscal system.
In an online press conference organized by the Tax and Fiscal Justice - Asia (TAFJA), the combined and resounding messages of speakers stressed that regressive tax policies exemplified by VAT and GST impact women, workers, farmers and other marginalized sectors the most and severely undermine their capacities to prepare for, respond to, survive recover and rebuild when crisis or natural disasters strike. Regressive tax systems, with their elite and gender biases are legacies of colonialism, part of systems that enable countries of the Global North to extract wealth from the Global South.
As the 77th United Nations (UN) General Assembly meets on 13-27 of September 2022, TAFJA and APMDD leaders called attention to the impacts of flawed fiscal and tax systems on the marginalized and common citizens. “While people are dying [in Pakistan], taxes from basic utilities are rising. The total price of electricity has tripled [amidst the emergency]” says Farooq Tariq of the Pakistan Kissan Rabita Committee. He mentioned that a Pakistani said that there are no relief efforts underway to alleviate the common people. “Regressive tax policies disproportionately burden women and disempowered, disadvantaged families” expressed by Vidya Dinker of the Indian Social Action Forum. Further elaborating that only when unfair tax burdens are removed from women and the marginalized can society move a step forward in eliminating poverty and inequality.
“In the Philippines, one public official, has already admitted that the cost of living of an ordinary worker is PhP42,000 (USD734) despite the reality that workers only receive about one-third of the cost of living expected by the public official” stated by Luke Espiritu of the Bukluran ng Manggagawang Pilipino or Solidarity of Filipino workers. Moreover, he said that taxing the billionaires even just 1% of their total assets, the Philippine government could come up with PhP1 trillion (USD17,469,384,000.00), a huge amount the state could use for a better delivery of social and public service.
“The same countries that give away a lot of money are the same countries that need it the most.” explained tax lawyer Tony Salvador of the Third World Network regarding the countries in Global South providing tax holidays for corporations while laborers continue to suffer from the burden of heavy taxation.
“While COVID-19 has brought further inequality, brought about extreme poverty, income loss, unemployment, and the suffering of the workers, the super rich have increased their wealth repeatedly during the pandemic” said Ah Maftuchan of The Prakarsa, citing that only if the people uphold the redistributive property of wealth taxing, can the society solve poverty and extreme inequality.
Sudhir Shrestha of the South Asia Alliance for Poverty Eradication explored the issues of taxation in Nepal pointing out that taxation policies in Nepal are made or drafted based on the interest of limited groups, instead of the general public, asking the question: “who is really running the government, the parliament or the businessmen?”
Dereje Alemayehu of the Global Alliance for Tax Justice (GATJ) criticized the “tax deal of the rich” being pushed by the Organisation for Economic Cooperation and Development as this proposition will only allow for further exploitation of the Global North countries of Global South countries. Instead the Global Alliance for Tax Justice together with its network members, including TAFJA and APMDD, calls on the UN to spearhead the return of international tax rules under UN auspices and the formation of a UN tax convention and body. Jeannie Manipon of APMDD called on governments and the international community to adopt a progressive tax and fiscal systems would not be prone to abuse by the elite and that would truly serve people’s needs.
SEA civil society groups resolve to advance advocacies for tax justice and the rights of workers, farmers, and women
Worsening inequality and climate impacts, unfair trade and global value chains, flawed tax systems and inadequate revenues to finance post-COVID recovery were tackled at a regional workshop organized by the Asian Peoples’ Movement on Debt and Development (APMDD) and Perkempulaan Prakarsa on 23-25 March 2022 in Bali, Indonesia. Participants from civil society groups in Southeast Asia resolved to strengthen their actions and collaborative campaigns for economic justice in the lead up to the G20 Summit slated to take place in November.
It was the first face-to-face civil society gathering convened by the APMDD and the Prakarsa under the banner of the Tax and Fiscal Justice-Asia (TAFJA) since the pandemic lockdowns in 2020. Close to 30 participants from Indonesia, Malaysia, the Philippines, Thailand, and Vietnam attended the workshop.
Ah Maftuchan, Prakarsa executive director, said that CSOs should seize various opportunities to continue the momentum of campaigning for economic justice. He noted that the Summit of the G20 or Group of 20 in November this year in Indonesia and in India in 2023 would be important advocacy moments. Prakarsa is in the leadership of Civil 20 (C20), a civil society platform to engage the G20 in political dialogue.
Lidy Nacpil, APMDD coordinator, said the current multiple crises that encompass health, food, financial, and climate crises challenge advocates to step up our campaigns for economic and climate justice. “The scale of relief needed, especially by those deeply affected economically, requires multi-government agencies to mobilize for the needs of people. Unfortunately, most proposals have not moved away from the usual ‘capital access’ and low-interest loans.”
Proposed solutions follow the current and flawed logic of the global economic system, Nacpil pointed out. “The major failure of this usual approach is that a bigger part of the wealth flows to richer northern countries, while the resources of poorer nations continue to be exploited… Recovery is being used by those exploiting the global system. What we need are genuine rebuilding and transformation,” she said. Nacpil cited the 15% minimum corporate tax proposed by the OECD in what they call the Two-Pillar Solution on Base Erosion and Profit Shifting” as an example of a false solution that does not benefit the peoples of the Global South. The OECD proposal is criticized by many CSOs as a ‘Tax Deal of the Rich’.
The workshop aimed to hone the campaigning skills of TAFJA members and other CSOs, and to contribute to shifting the discourse on tax incentives, ending the race to the bottom in tax competition, curbing tax avoidance and evasion, and strengthening the advocacy for increased resource allocation for social protection and public services especially for women.
Key Issues and Initiatives: Mapping Out Realities on the Ground
Through country presentations and mapping exercises, the participants shared about current initiatives and surfaced priority issues for campaigning.
Dinda Nuur Anisaa Yura of Solidaritas Perempuan (Women's Solidarity of Human Rights) in Indonesia spoke of human rights concerns arising from ill-advised projects that have resulted in environmental degradation. An example given by Yura is the Poso Hydro Power that early this year had announced support for the government’s effort for green energy. But, while the energy output is ‘clean’, the infrastructure construction has submerged farmlands which resulted in crop failures, endemic fish loss, loss of farmlands and food resources; and possible loss of cultural heritage.
Elaborating on the gender dimensions and layered impacts of the issue, she said that environmental degradation and the potential for disaster adds to the burdens of women who have to care for family needs and manage natural resources at the community level.
Mugheelan Sellathoray of the Monitoring Sustainability of Globalisation (MSN) in Malaysia spoke of the COVID lockdowns and the hardships suffered by frontliners, agriculture workers, migrant workers and those who lost their jobs. Meanwhile, there are families who are not getting subsidies for online education or any assistance when family members contract COVID-19. He said the political instability in the country added to the tensions as partisan politics slowed the provision of social protection measures.
Maricon Jesusco spoke about the Oriang women’s movement in the Philippines and its work on fighting inequality and women’s oppression. Oriang has led nationally coordinated actions to campaign for debt cancellation, tax justice, climate justice, and human rights. Reflecting on Oriang’s work in the province worst-hit by the 2013 Super Typhoon Haiyan, the strongest typhoon on record, she said that affected communities have not fully recovered and that rehabilitation assistance have mostly been extended to the business sector, not to the most vulnerable sectors.
Movements in the Philippines have also been involved in legislative advocacy. Vicente Barlos of the progressive coalition Sanlakas spoke about their push for the repeal of a martial law-era law that provides automatic appropriations for debt payments in the national budget. Another priority for Sanlakas is advocating for pro-worker reforms in the rules and regulations that govern recruitment and placement of industry workers by private employment. Sanlakas is also pushing for the adoption of a wealth tax, “buwis sa yaman, hindi sa kita” (tax on wealth, not just income).
Ha Thi Chu of ActionAid Vietnam (AAV) noted that among the key developments in the country are Vietnam’s commitments to stop building coal power plants and to zero emission by 2050. A new wage regime is also planned for the public sector, including the care sector by 2023. The situation of unpaid care workers is an important indicator to monitor gender equality progress until 2030, she said.
AAV, according to Ha Thi Chu, has several major advocacy actions and public campaigns for fair fiscal governance. AAV is advocating for the government to prioritize public welfare vs austerity measures, and for the Ministry of Finance to increase budget allocations for public health, prioritize the needs of people especially those in the informal workforce, and rebuild the economy. Vaccine equality and climate justice are also important advocacies. In all these advocacies, she said it’s important to bring the voices of peoples from the Global South, especially those excluded from negotiations like climate talks, to deliver a powerful message.
Pham Van Long of the Viet Nam Center for Economic and Strategic Studies spoke of ongoing research on the tax burdens of different sectors in Vietnam that will form the basis for the policy advocacy activities of the Vietnam Alliance of Tax Justice. He said the core of the current state budget revenue is value-added tax, accounting for 33.27% of total tax revenues. The business tax rate is stipulated by law to be 20 percent, lower than the 21.7% average tax rate for Southeast Asian countries in 2020. “The tax burden in Vietnam is excessive and reforms are required to promote growth,” he said, adding that Vietnam is the lowest income country among similar countries in the ASEAN, but its share of tax revenue/GDP is the highest.
Participants surfaced other priority issues during a facilitated mapping exercise. Topping the list are:
hunger across sectors, and increasing demand for social care and social protection; worsening inequalities, and continuing male dominance especially in the agriculture industry; labor and workers’ issues including low minimum wage and vulnerabilities of migrant workers;
inadequate domestic revenue to finance post-COVID recovery and need for alternative domestic revenues and fair tax-based solutions; debt trap of low and middle income countries and austerity conditions imposed; regressive taxation system; G20 proposed global minimum corporate tax; tax incentive competition; and
exploitation of natural resources and impacts of climate change; the need for transparency, accountability and participation in climate finance, and for just climate and energy transition.
Food, Agriculture, Trade, and Tax: Value Chains and Fiscal Policy
This panel discussion underscored the importance of analyzing global value chains, especially in food and agriculture, to see how these shape the economies of developing countries and impact on the situation of farmers and food producers. Resource persons of this session were Dati Fatimah (Indonesia), Thanh Nguyen Duc, Ph.D.(Viet Nam), and Wanun Permpibul (Thailand) with Herni Ramdlaningrum of Prakarsa moderating.
In Viet Nam, there has been a deliberate push for getting bigger shares in the global market for its agricultural products. Dr. Nguyen said that Vietnam emerged as a major coffee producer following a deliberate publicly-supported move into the sector with a focus on cultivating the flavourful Robusta beans. As a result, between 1980 and 2000, Vietnam went from producing 8,400 tons of coffee to producing 900,000 tons.
Wanun Permpibul said farmers in Thailand are now pushed to produce for the global market but for farmers rice is not a commodity but a livelihood. She shared that traditionally in Thailand rice is grown for consumption and only what is left is sold. The problem of the global rice value chain is that the “farmers, our food producers, are not properly recognized,” she said.
Dati Fatimah pointed out that economies are not engaged in the global value chain (GVC) on an equal footing.. She said countries differ in where they are located in the GVC with upstream countries, mostly from the Global North, possessing knowledge of the process and processing the raw materials and therefore benefiting more. Farmers downstream of the value chain, have no say in policies, she noted.
The discussion on food and agriculture continued in breakout groups. Participants discussed free trade impact upon local farmers (e.g. IPRs), sea pollution impact on fisher folks, farmers’ lack of access to production inputs, and the lack of acknowledgements of women’s role in food production.
For food security for the world, the group identified the adoption agriculture traditional system, the Subak system, a water management (irrigation) system for the paddy fields on Bali island, Indonesia. They also resolved to collect data on agriculture supply chains and to dialogue with MPs and government. Also suggested was the holding of a Southeast Asia farmers’ festival and joint campaigns with alliances to coincide with events like the UN Food System Summit or around the dates of the adoption anniversary of the anniversary of the United Nations Declaration on the Rights of Peasants and Other People Working in Rural Areas (UNDROP) or the UN Declaration on the Rights of Indigenous Peoples (UNDRIP).
Campaigning for Economic Justice
In campaigning for economic justice, issues in global economic governance and continuing power imbalances and asymmetrical relations need to be addressed. These are also reflected in current global tax rules and rule making. Jeannie Manipon, APMDD Development Finance program manager, asserted that “national tax systems in many parts of the world are legacies of our colonial history, and thus tilted towards serving the interest of the former Western colonial powers, multinational corporations, and local elites.”
She said the grave inequalities, within and among countries, and elite and gender biases must be addressed to overcome crises and build a sustainable people’s recovery. Manipon also presented a comprehensive tax justice advocacy and campaign agenda contained in the People’s Manifesto: Tax the Rich, Not the Poor! Make Taxes Work for People and Planet. The agenda and policy recommendations were hammered out by the APMDD through country consultations, joint actions and the People’s Assembly for Tax Justice held on 30 October 2021.
The People’s Manifesto puts forward seven demands for fundamental reforms to address flaws in tax systems, policies, and ‘rule-making’ that exacerbate inequalities. The first demand is to “Tax the Rich, Not the Poor”. Governments are being called to institute a progressive tax on wealth and accumulated assets of high net-worth individuals, and for countries around the world to establish cooperative mechanisms to strengthen the effective enforcement of wealth taxes by plugging loopholes that allow for illicit financial flows of untaxed wealth.
The second demand is to “Make Taxes Work for Women and Other Marginalized Sectors”. The demand requires that tax and fiscal systems address gender biases and discriminatory policies that deepen inequalities and reinforce economic and social exclusion. The five other demands are *Reclaim public services; increase and mobilize public funds for fulfilling peoples’ rights and needs!; *Make MNCs Pay Their Share! Stop Corporate Tax Abuses and Other Illicit Financial Flows (IFFs); *Advance Tax Justice in the Extractive Industry!; * End Inequalities in global tax rules and rule-making!; and, System Change, People First Before Profit!
The work of the Tax and Fiscal Justice-Asia was also discussed in this session by Becky Lozada, communications staff of APMDD Development Finance program. Formed in 2004, TAFJA is a regional alliance united in campaigning for greater transparency, democratic oversight and redistribution of wealth in national and global tax systems. It has working groups on tax and gender justice, on tax Justice in the extractives industry, on tax and ecommerce, among others.
Lozada spoke on the TAFJA position hammered against the “tax deal of the rich” proposed by the Group of Seven in June 2021 for a 15 percent global minimum corporate tax rate. She said TAFJA along with other tax justice groups has long called for at least 25 percent as a global minimum so that resources can be generated to tackle social-economic crises and to provide essential public services to people. “TAFJA has thrown its weight behind the call for democratic and transparent mechanisms to address the global dimensions of tax abuses. Part of the TAFJA press statement in June reads ‘with countries of the Global South most severely encumbered by foregone corporate tax revenues, we reiterate our call for a UN Tax Body towards more just and fair international tax rules,’” she said.
A breakout group on Inequalities and Economic Justice, looked into the lack of social protection for indigenous people, the situation of undocumented and informal workers, women’s lack of access to policy processes, development projects that impact negatively on women, climate change and energy, and free trade agreements.
They also discussed tax issues from the impact of taxes on rice prices and availability, VAT, and the need to enforce higher corporate taxes, and growing calls for a wealth tax like the windfall tax imposed by Malaysia.
The group recommended five points to raise these issues, especially before the G20, GCF Board Meeting, UNFCCC, Regional Comprehensive Economic Partnership (RCEP) processes:
-Involving women's participation during the decision making process for any project or program implemented in the community
-Empowering women to fight the difficult situation impacted by inequality economic policy by creating an economy creative SME independently
-Reducing retail tax (VAT) for consumers especially products mostly purchased by women and family goods, and increasing corporate tax to get distributed transparently for public facilities development and social protection program
-Ensuring the economic protection of women, including informal worker, by providing guaranteed access to availability of facilities, access to business permits for poor women.
-Stop the programs and projects that ignore human rights, prioritize projects that are environmentally sustainable, gender responsive and side with women.
Gender and marginalized communities
This session, in solidarity with the Global Days of Action on Tax Justice for Women’s Rights, featured Titi Soentoro of AKSI! and Hoang Phuong Thao of ActionAid Vietnam as resources persons with Aryanto Nugroho of Publish What You Pay Indonesia moderator.
Expounding on gender and economic justice, Soentero gave a feminist perspective in looking at the issues, especially policy measures to solve problems that miss the mark because of patriarchy. “Women are not in decision processes, whether in home or in governments,” she said, noting that this situation leads to bad decisions. An example given by Soentero is how in Java a geothermal project meant for “clean” energy resulted in trees being cut down and environmental destruction. “Women have had to walk farther to fetch water, because their traditional source of water was now controlled by the geothermal project,” she explained.
Thao emphasized the urgency of reclaiming public services as part of efforts to end inequality and poverty. She said tax and fiscal justice should go together but this will not happen under the mindset of the race to the bottom in corporate taxation aggressively being proposed by the G7-G20 and OECD.
A session on advocacies in Bali also focused on the situation of women. Nengah Budawati, of Women Crisis Center-LBH Bali gave a glimpse into the grim realities of women in Bali. She said they have to contend with violence , including sexual assaults, discrimination even from members of their families especially if they bear no son(s), and undervaluing and non-recognition of women’s work. Women are bullied when the land they till yields little harvest; men are known to leave their family when they have only daughters but still inherit everything. There are cases of sexual crimes committed by “male holy persons” that go unpunished.
“The Women Crisis Center-LBH led by Buda, as she is fondly called, ,provides shelter and training for women to run livelihoods, exclusively to help women, for “the victims to help other victims,” as they are “usually ignored by society,” she said.
Women’s Voices for Tax Justice: Women, Mining and Climate
As a contribution to the Global Days of Action for Tax Justice for Women’s Rights called by the Global Alliance for Tax Justice (GATJ), APMDD and TAFJA also held an online forum to listen to women’s voices for tax justice and explore how mining and illicit financial flows impact on women’s rights and resilience in the face of an alarming climate crisis.
Read more here.
Campaigning on Global Tax and other Finance and Development Issues
Dereje Alemayehu, executive coordinator of the Global Alliance on Tax Justice (GATJ), addressing the workshop remotely, emphasized the importance of pushing for inclusive processes that will allow the Global South, especially civil society, to truly have a say and be heard on financial policies. He pointed out that the G20 follows the lead of the G7, including in supporting the “Inclusive Framework” that pushed for the new minimum corporate tax rates that benefits corporations and the big economies rather than countries of the Global South.
He called on civil society to further put pressure on national governments to reject the tax deal of the rich. There is urgency to this issue because the OECD is now moving to put the legal and institutional arrangements for the “tax deal of the rich” in place, he said.
Another decision-making moment was the focus of the talk of Pooja Rangaprasad, policy director, Financing for Development, Society for International Development (SID). She called attention to the inputs of civil society groups for a fourth UN Summit on Financing for Development or g Monterrey+20 Summit. She said 2022 marks 20 years since the first International Conference on FfD was held in Monterrey, Mexico that resulted in a landmark international consensus to address key financial and related issues pertaining to global development which took place just as the world was reeling from economic recession. “Such a summit has never been more urgent again given the financing needs in the context of the COVID-19 pandemic, and future summits including the UN Social Summit in 2025 that will only succeed if urgent reforms of the global financial system are advanced. It is time for UN member states to convene the 4th FfD conference/Monterrey + 20 to agree a new global consensus on an economic,” Rangaprasad said.
The Consensus of the FfD in 2002 included the critical goals of eradicating poverty and promoting sustainable development to advance to a fully inclusive and equitable global economic system. The FfD included the consideration of an international debt workout mechanism and equitable international taxation policies.
Taxation of the digital economy and e-commerce remains one of the thorny issues in global tax policy debates, and where interests of countries in the global north and global south tend to collide. Tony Salvador of the Third World Network (TWN) explained that according to current global tax rules taxation of corporations is based on where they have physical presence or permanent establishment (tax treaty) but digital platforms do not need physical presence to do business in market jurisdictions. He said national governments should decide on how and what taxes are collected from digital corporations doing business in their jurisdictions. “This cannot be left to an international agreement as sought by the G7, G20, and the OECD. We need to push national legislatures to pass or maintain digital services taxes or otherwise tax foreign on eCommerce transactions.” Reforms are also needed in the international tax architecture, and the United Nations, according to Tony, is the proper venue to discuss international tax matters and called for support for the proposed UN Tax Convention.
The training workshop was a breakthrough face-to-face event for the organizers with many safeguards including various COVID tracking measures and tests for all participants to hurdle. It was held just a few days after C20 Indonesia staged the C20 Kick Off Ceremony & Meeting titled Listening to the World in Bali, in 7-9 March 2022.
Training participants came from Prakarsa, APMDD, TAFJA and network partners, including
∙ From Indonesia, participants came from
-Aksi! for Gender, Social, and Ecological Justice
-Publish What You Pay Indonesia
-Women Crisis Center - LBH
-Solidaritas Perempuan (SP)
-Transparency International Indonesia
-Association for Women's Small and Micro Business Assistance or ASPPUK
-Agrarian Reform Consortium (KPA)
∙ From Malaysia, the research based advocacy organization Monitoring Sustainability of Globalisation (MSN)
∙ From the Philippines, Oriang women’s movement and Sanlakas
∙ From Vietnam, ActionAid Viet Nam and the Viet Nam Center for Economic Studies and Strategic Studies (VESS)
Resource persons from Climate Watch Thailand and Indian Social Action Forum joined online sessions.
The training workshop is part of the activities of the Oxfam-supported project, “Fair for All: Improving economic-social justice through agriculture-value chains and fiscal policy reform.”
After the workshop, some participants sat down with groups in Indonesia, and with representatives from other countries also joining in via a Zoom link, in a meeting of the C20 Working Group that was opened up to workshop participants.
Facilitated by TAFJA’s Vidya Dinker and Prakarsa’s Herni Ramdlaningrum, those present were given an overview of the G20 by Ramdlaningrum. APMDD and Prakarsa committed to work together with the Working Group on Taxation and Sustainable Finance that has put on the table proposals for increased tax revenues to finance COVID-19 programs and climate mitigation under SDGs 2030 and Paris Agreement 2050; ecommerce taxation; and, ways to push for a more inclusive inter-governmental tax body,
The Working Group shared their concerns and discussions on the tax proposals from the G7 countries for global minimum corporate tax of 15% that does not effectively tackle profit shifting and tax dodging practices by multinational companies. The plans of the working group will be hammered out further and presented in various engagement opportunities up to the G20 Summit in October.
A briefing on a ground-breaking proposal for fair and inclusive global solution to economic crisis was provided by Tove Maria Ryding, tax justice coordinator of the European Network on Debt and Development (Eurodad). She spoke on a civil society proposal for a UN Tax Convention, launched on March 10, which aligns international tax governance to key global commitments and obligations, including human rights, equality, gender environmental protection and the Sustainable Development Goals. The United Nations is the forum that leads on these issues and, at the same time, it is the only truly universal body that exists. That makes the UN the obvious place to anchor a truly global convention on tax. Bringing the Convention in the United Nations would provide all countries equal footing in the discussions, she stressed.
The 17th G20 Heads of State and Government Summit will take place in November 2022 in Bali on the theme “Recover Together, Recover Stronger”. Formed in 1999, the Group of Twenty or G20 consists of the world's major established and emerging economies, the 19 countries -- Argentina, Australia, Brazil, Canada, China, Germany, France, India, Indonesia, Italy, Japan, Mexico, the Russian Federation, Saudi Arabia, South Africa, South Korea, Turkey, the UK, and the US -- and the European Union.
Agreements of the Group of Seven in its meeting early June has set the stage for even tougher fights ahead for tax justice advocates in Asia and around the world campaigning for an overhaul of tax rules to reverse growing inequality and deepening poverty.
“The G7 has decided on a tax deal among the richest 10 percent in the world for their exclusive benefit, aggressively eclipsing the global tax agenda ahead of the United Nations General Assembly, decried Lidy Nacpil of the Asian Peoples’ Movement on Debt and Development (APMDD), a member of the Tax and Fiscal Justice Asia (TAFJA) network.
“The much-vaunted pact hammered out by G7 finance ministers for a 15 percent global minimum corporate tax rate is nothing but an invitation to a race to the minimum,” says Hiroo Aoba who sits in the coordinating committee of TAFJA, representing Public Service International Asia- Pacific Office. He points out that business circles in such countries as Australia and Denmark have begun calling for lowering their corporate tax rates.
"The unacceptably low 15% minimum corporate tax rate seeks to disincentivize rich country corporations from shifting their profits from their home countries to low tax jurisdictions, but does not address the ability of the digital corporations to make tons of money in developing countries without paying corporate income tax there since they are supposedly not even present in those countries," explains Third World Network (TWN) tax lawyer Tony Salvador.
“The international tax justice campaign has long called for at least 25 percent as a global minimum. A higher minimum could generate resources necessary to tackle social-economic crises triggered by the Covid-19 pandemic and to provide essential public services to people,” Aoba adds.
Ah Maftuchan, executive director of the Jakarta-based think tank, PRAKARSA, notes that research from Tax Justice Network, a group advocating transparency in international finance, shows that a 25% minimum effective tax rate could raise US$780 billion in additional revenues worldwide.
“An alternative, fairer model for revenue-allocation proposed by civil society, known as METR, a Minimum Effective Tax Rate for multinationals, would provide non-G7 states with an additional US$355 billion,” notes Aoba.
A TAFJA member closely monitoring emerging rules on taxing the digital economy has raised another red flag. “We worry about the trajectory of the G7 statement, as it is consistent with efforts to GATTicize the power of sovereign nations to impose taxes, especially with respect to e-commerce and the digital economy. There are disturbing initiatives to impose an international tax legal framework where nations are forced to accept as normal the imposition of trade sanctions for simply exercising the sovereign right to tax. This is totally unacceptable,” says TWN’s Salvador.
He further emphasizes a fundamental principle: "The power of taxation is an essential attribute of a sovereign nation and its exercise emanates from its people and devolved upon the legislature of each nation. It should not be hindered even by international processes nor held hostage to the desires of big corporations domiciled in rich nations."
Lidy Nacpil is calling on tax justice advocates to press forward and fight for democratic mechanisms under the United Nation to address the global dimensions of tax abuses while upholding sovereignty of nations. “With countries of the Global South most severely encumbered by foregone corporate tax revenues, we reiterate our call for a UN Tax Body towards more just and fair international tax rules.”
TAFJA is a regional network of the Global Alliance for Tax Justice GATJ), a growing movement of civil society organisations and activists, united in campaigning for greater transparency, democratic oversight and redistribution of wealth in national and global tax systems.
GATJ executive coordinator Dereje Alemayehu earlier denounced the agreements forged by the G7. “It’s a déjà vu! The G7 strikes a deal among themselves and paves the way for a manipulated endorsement as an international agreement in informal platforms created by their OECD, outside the UN system.”
He warned that “developing countries are then locked forever into an ‘international agreement’ with ‘binding and non-optional dispute resolution’ arrangements which will continue to deny them their taxing rights on part of global profit generated in their economies.”