TAX JUSTICE

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!

Download the Inequality, Tax Justice and the Philippine Wealth Tax Campaign | Monograph pdf version here.

Read the Monograph on the UP CIDS website

Download PDF here :  ISSUE BRIEF ON WOMEN AND WEALTH TAX

The call “Wealth Tax Now!” gains ground as inequality and poverty deepens in Asia and across the globe. 

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Read the PDF version here.

Many communities in the Philippines suffer the disastrous effects of open-pit mining. At least 75% of mining corporations audited by the Department of Environment and Natural Resources (DENR) in 2016 employed open-pit mining methods for extracting copper, gold, nickel, and chromite¹. From 2017 to 2021, several open-pit mining exploration permits and all other pending applications were suspended as a result of the mine audit, which found widespread violations of environmental and social standards in a majority of existing open-pit sites².

Open-pit mining is a type of mining operation that involves removing large amounts of earth to access deposits of valuable minerals or ore and remains to be the most widely employed method for mineral extraction in the Philippines. While the mining industry promises that mineral extraction is an important source of income and economic development for a community, open-pit mining has been proven to be associated with several negative impacts.

Communities witnessed how open-pit mining largely contributed to destruction of the local environment. To access the minerals or ore, large amounts of topsoil and underlying earth must be removed. This results in air, water, and noise pollution, as well as damage to habitats and ecosystems. This has a range of negative consequences for the local flora and fauna, and results in the loss of essential resources like timber, arable land, and clean water. This was clearly demonstrated by the1996 Marcopper disaster in Marinduque which annihilated the biosphere of the Boac River and the flooding of twenty villages due to polluted water from mine tailings contaminating the river basin³. In Manicani, the waste produced by the Hinatuan Mining Corporation's nickel mine led to environmental degradation via polluted water due to excessive soil extraction and rain run-off⁴.

In addition to environmental impacts, open-pit mining also has social and economic impacts on the local community, such as public health.  The noise, dust, and other forms of pollution triggered by mining operations have been linked to respiratory and other illnesses as well as water-borne diseases from polluted water. In Sta. Cruz, Zambales where four major nickel mining companies were suspended in 2014 for violations of environmental regulations⁵, there were noted instances of acute upper respiratory infections, skin rashes, and several other diseases among mining-affected communities⁶. As such, mining-affected communities have specific medical and other health needs that arise because of their direct and indirect exposure to mining operations’ hazards and other impacts.  This requires access to services that address, among others, the specific health impacts of pollutants created by the mining operations. 

Due to the location-specific nature of the extractive industry, mining operations strike deep into remote areas where mineral and other natural resources are most rich and where communities’ livelihoods and cultures are defined by their close affinity to the natural environment. These communities, however, have historically been among the most marginalized from the centers of political power and economic decision-making, and have had to survive with the least access to public services and other support systems, including basic medical care and preventative health services, such as vaccinations and screenings. Region IVB (MIMAROPA), home to some of the largest mining operations such as the Rio Tuba Nickel Mining Corporation in Palawan and previously Marcopper in Marinduque, is the region with one of the lowest doctor-to-patient ratios (1.8/10,000) and hospital bed-to-patient ratios (1/10,000) in the country. These figures fall drastically below the 10/10,000 ratio prescribed by the World Health Organization⁷. In addition, the health spending of provinces affected by mining decreased from 21.43% of their total operating expenses in 2005 to only 16.1% in 2010 despite the generally upward trend of mining output in this period⁸.

As it stands, mining does little to improve the social and economic health of these communities. Indeed, mineral-rich communities have historically been deprived of access to public services such as electrification, schools, and hospitals. This lack of access is compounded and further compromised by the impact of mining on the land and water resources of these communities through mining pollution, affecting agricultural livelihoods. In Didipio where mining operations of Oceana Gold Inc. (OGI) take place, households are estimated to only utilize 0.4% of the water resources used by corporations in the Didipio Mine⁹. 

Public Services Essential to Communities’  Health and Resilience 

To mitigate the effects of pollution caused by open-pit mining, the government must urgently  provide public services such as clean drinking water, health care, and education to mining-affected communities. 

Much of this damage co-occurs with the continuation of mining operations, hence communities’ call to halt mining activities in severely impacted areas. The Writ of Kalikasan¹⁰ is an important legal tool in this regard, as used successfully by the Concerned Citizens of Santa Cruz Zamboanga against five mining corporations in 2016. The issuance of the Writ urged the court to suspend mining operations in the area to halt immediate damage to the water sources¹¹.  

Likewise, if the mining operations result in air or water pollution, it is essential to prioritize ecological restoration to help protect the health and well-being of the community. As it stands, there is a lack of sufficient recognition of ecological destruction by government or the culpability of this destruction by large mining corporations. Mining companies must account for the costs of community rehabilitation and ecological restoration.

Not only do public services mitigate immediate impacts, they also build or restore communities’ resilience, including abilities to sustain livelihoods in the long run. Providing access to education and jobs, as well as subsidies for local businesses, helps to ensure that members of the community are equipped to participate in the local economy and prioritize ecological restoration. 

However, public education and job trainings mean little if the land becomes unusable for economic development. This was indeed the case in Tampakan, South Cotabato, where mining waste from tailing ponds threatened the fecundity of local farmlands and the viability of the tuna industry in General Santos¹². Philippine provinces hosting large-scale mining operations are among those with the highest poverty incidence with at least 30% of their population living below the poverty line, with the exception of provinces that have diversified economic activities beyond mining¹³. Hence, it is necessary to prioritize the preservation of land and water resources such as agriculture and fisheries that are independent of mining activities.

Gender-responsive public services must also be in place for women in mining-affected communities. Access to reproductive health care and family planning services, as well as support for maternal and child health are often out of reach in rural mining areas. Women in communities affected by mining tend to carry the responsibility of providing food for their families and therefore need access to food sources, which can be severely compromised by the impacts of open-pit mining on agricultural lands. Chemicals used in the mining process leeches into the soil and contaminate local crops, making them unsafe for food consumption. Similarly, water pollution increases the difficulty for women to access clean water for irrigation, cooking, and drinking, and impacts the availability of local fruits, vegetables, and other food sources.

Increased vulnerabilities to natural disasters and Irreversible Effects of Mining

Mining-affected communities are also more vulnerable to natural disasters and require specific disaster risk management services. Open-pit mining creates risks of landslides, flash flooding, and other natural disasters that occur with heavy rains or earthquakes because forests absorb and retain a lot of water and open-pit mining destroys an environment’s ability to absorb water through the destruction of the forest and compromising soil integrity. These vulnerabilities are first and foremost caused by the open-pit method itself. Hence, many communities advocate for the reduction or cessation of these operations to alleviate these vulnerabilities. 

However, restoration may even be more challenging, if not impossible, for areas with  long-term exposure to open-pit mining or other irreversible effects of mining. In a number of high-profile cases, mining results in the complete destruction of the local environment, making it difficult or impossible to restore the area to its previous natural state. In other cases, the damage may be more limited, but can still be significant, requiring large-scale restoration efforts. The restored environment may also be vulnerable to future damage from other human activities, such as logging or development. Hence, communities in these areas demand rehabilitation and ecological restoration as urgent measures that governments must compel mining corporations to undertake.

Mitigating Mining’s Social Impacts and Economic Deficits Through Tax Justice

There is a need to systematically address mining’s social and environmental impacts through stricter regulation of the industry and comprehensive provision of public services. Mining companies should be made to pay for rehabilitation and compensation for social and ecological damages.  Mining profits should be taxed fairly and justly to raise the countries’ domestic revenues.    

All in all, the scale of the extractive industry’s environmental impacts and communities’ heightened vulnerability to poverty, food insecurity, and ecological risk underscore the critical importance of tax justice in the extractives sector. In the Philippines, the miniscule contribution of the extractives sector to the economy and employment sharply contrasts with the profits enjoyed by corporations. These issues to an environment where financial secrecy and regulatory loopholes in the taxation system enable large-scale tax avoidance.

Instead of plugging the leaks and addressing tax abuses by corporations, the Philippine government itself allows for large-scale revenue erosion in the sector through its provision of tax incentives in mining permits. Fiscal devolution where several layers of taxation operate from the local to the national level has also provided corporations the leeway to skirt tax obligations, and engendered legal challenges by local governments over taxing rights and revenue management.

Meanwhile, resources available for public services and addressing impacts of mining for affected communities are severely limited. Municipalities affected by mining were found to utilize and depend on tax revenues from mining to fund as much as 43% of their annual budgets¹⁴. As such, mining corporations’ repeated attempts to dodge taxation through challenging tax claims of local governments in court as in Nueva Vizcaya¹⁵ and South Cotabato¹⁶ gravely impede the provision of public services in communities most directly affected by extractives activities. To address the multiple crises faced by mining-affected communities, it is imperative that corporations are sanctioned to pay for the impacts and damages caused by mining and their just share of taxes to fund the provision of public services.

At the end of the day, the extractive industry impacts mining-affected communities’ ability to enjoy their right to access to quality public services many times over: firstly, by exposing communities to health hazards and other risks; secondly, by negatively impacting livelihoods and access to water and other natural resources which in turn increases their social and economic vulnerabilities and abilities to access affordable social services; and thirdly, because the foregone revenues lost to the extractive industry’s profit shifting and the tax incentives they enjoy, the public financing of social services for the entire country is also severely compromised. 

Moving forward, addressing deficits in public services due to extractives activities requires transformative and multi-level policy reforms on the local, national, and global levels. The national government must proactively strengthen tax enforcement to make corporations pay their just share and ensure that mining tax revenue-sharing is made fairer, reducing the burden on local governments to generate revenues. There must also be efforts towards improving financial transparency in extractives on the local level, involving communities in reporting and analysis, on the national level through a stronger and public beneficial ownership registry, and on the global level through ensuring that developing countries like the Philippines are able to access automatic exchange of information (AEOI) and be able to work with other countries affected by extractives activities to curb transfer-pricing and other illicit financial flows (IFFs) in the sector through a democratically negotiated tax convention at the United Nations.

Endnotes:

1 Mining Industry Coordinating Council, “Review of Philippine Large-Scale Metallic Mines: Going Beyond Compliance Towards Sustainability” MICC Policy Note, Vol. 1 No. 1, April 2022, https://www.dole.gov.ph/php_assets/uploads/2022/06/MICC-Mining-Policy-Note-Online-Version.pdf

2 Keith Schneider, “Philippines bans new open-pit metal mines,” Mongabay, April 28, 2017, https://news.mongabay.com/2017/04/philippines-bans-new-open-pit-metal-mines/

3 Gwen de la Cruz, “Look Back: The 1996 Marcopper Mining Disaster,” Rappler, March 24, 2017, sec. MovePH, https://www.rappler.com/moveph/165051-look-back-1996-marcopper-mining-disaster/.

4 PNA, “Hinatuan Mining Told to Stop Transporting Nickel Ore Stockpile,” SUNSTAR, July 21, 2016, https://www.sunstar.com.ph/article/87093/hinatuan-mining-told-to-stop-transporting-nickel-ore-stockpile.

5 “4 mining firms suspended over ‘unsystematic’ methods”. Rappler. July 24, 2014. https://www.rappler.com/business/industries/64247-4-mining-firms-suspended-unsystematic-methods/

6 Anniebeth N. Farin, “The Health Problems of the Residents in the Mining-Affected Areas in Santa Cruz, Zambales, Philipp by Iaset Journals,” International Journal of Humanities and Social Sciences 7, no. 6 (November 2018): 23–36.

7 UP COVID-19 Pandemic Response Team, “Estimating Local Healthcare Capacity to Deal with COVID-19 Case Surge: Analysis and Recommendations,” University of the Philippines, April 20,2020, https://up.edu.ph/estimating-local-healthcare-capacity-to-deal-with-covid-19-case-surge-analysis-and-recommendations/

8 Magno, Cielo (2016) “Extractive industries and the financing of child-inclusive social development in the Philippines: Trends and policy frameworks,” UNRISD Working Paper, No. 2016-2, United Nations Research Institute for Social Development (UNRISD), Geneva, https://www.econstor.eu/handle/10419/148754

9 Magno, Cielo and John Christopher Lawrence Morillo, “Case studies on the water use of large scale mining in the Philippines,” UPSE Discussion Paper No. 2019-03 https://econ.upd.edu.ph/dp/index.php/dp/article/view/1522

10 The Writ of Kalikasan is a legal remedy that seeks to protect citizens and communities against acts that damage the environment, as guaranteed by the Philippine Constitution in recognition of the “right of the people to a balanced and healthful ecology in accord with the rhythm and harmony of nature” (Article II, Section 16 of the 1987 Constitution)

11 Sunnex, “SC Issues Writ of Kalikasan vs 5 Mining Firms,” SUNSTAR, September 29, 2016, https://www.sunstar.com.ph/article/81424/sc-issues-writ-of-kalikasan-vs-5-mining-firms.

12 Justice and Peace Desk, Social Action Center, Diocese of Marbel, “Mining in the Municipality of Tampakan: Risks and Alternatives,” https://www.slideshare.net/no2mininginpalawan/mining-in-the-municipality-of-tampakanrisks-and-alternatives.

13 Magno, Cielo (2016) “Extractive industries and the financing of child-inclusive social development in the Philippines: Trends and policy frameworks,” UNRISD Working Paper, No. 2016-2, United Nations Research Institute for Social Development (UNRISD), Geneva, https://www.econstor.eu/handle/10419/148754

14 Ibid.

15 John Victor D. Ordonez, “Tax court denies OceanaGold’s appeal to review liabilities,” BusinessWorld, June 7, 2022, https://www.bworldonline.com/corporate/2022/06/07/453185/tax-court-denies-oceanagolds-appeal-to-review-liabilities/

16 Bong S. Sarmiento, “Tampakan mine operator raps LGU over tax demand”, INQUIRER.Net, September 15, 2022, https://newsinfo.inquirer.net/1664417/tampakan-mine-operator-raps-lgu-over-tax-demandi