Tax is necessary to fund essential services. This is particularly relevant to countries in Africa, Asia, & Latin America (southern countries) for a number of reasons. Firstly, southern revenue authorities already tend to be under-resourced, for many reasons but one of which is the issue of sovereign debt (see FreshUp guide on Debt). This creates a vicious cycle whereby with less revenue, the tax authorities struggle to improve their tax-collection capacity.
A key issue found across the board is the association between tax justice & development. In the 2000s, Christian Aid began to link tax to global inequality & development issues by publicising the fact that developing countries lose more money through the tax evasion practices of large corporations than they receive through official aid. Moreover, global tax rules that facilitate tax dodging are exploited by corporations & wealthy individuals to deliberately deprive countries of the resources they need to meet their country’s needs & fulfil human rights obligations. Tax justice advocates frame tax malfeasance or bad practice as an issue of concern to human rights, because without government revenue from tax, it is much more difficult for a government to fulfil obligations relating to health, education, security, climate change & other issues.
Additionally, insufficient tax from corporations & wealthy individuals has knock-on effects domestically regarding the burden of ensuring sufficient tax revenue is generated, as when governments don’t have sufficient tax revenues from a variety of sources to meet the country’s needs they are encouraged to place the tax burden on the everyday person.
Furthermore, when governments cut public spending or increase everyday taxes to plug the revenue gap, this burden falls disproportionately on certain social groups. One of the ways they do this in the absence of corporation taxes is by increasing indirect taxes such as Value Added Tax. This disproportionately affects women & girls because they spend most of their income on household goods. Additionally, flat-rate personal taxes are more likely to increase the tax burden on those with lower incomes. In many countries, this is disproportionately women.
What’s more, according to the International Labour Organisation (ILO), women perform more than 76.2% of the total hours of unpaid care work, so when governments cut public services through austerity measures to increase revenue, women act as ‘shock-absorbers’, taking on the care & educational work that must be done regardless of public support.
