Tax policies in three of world’s largest emerging economies jeopardizing efforts to fight inequality

“Regressive tax policies in Indonesia, South Africa and Brazil has meant that these countries’ poor are paying proportionately more taxes than rich people. The tax burden on middle class workers is bigger than the one placed on industry, holding back these countries’ tax collection potential that would provide important funding for universal and better quality public health and education services. This is totally unfair and unsustainable in the long term”, says Yustinus Prastowo, one of the co-authors of the study.
The study concludes that Indonesia, South Africa, and Brazil rank among the very top of the world’s nations who are suffering massive tax evasion as a result of international taxation loopholes, which often favour the most wealthy and multinational corporations.
Denise Dube, Acting Tax Justice and Extractives Officer for SANI/Economic Justice Network said “The Addis Financing for Development conference is a crucial opportunity to correct an outdated international financial system, which has put the world on a path of poverty, escalating inequality, and caused years of austerity. The international tax system is broken and unfair. We are living in an ever-more globalized world, where the mutually reinforcing connections between local elites and global elites must be addressed. We call on the States gathering in Addis to commit to go further than the current G20 /OECD-led international tax reform and support UN-led global tax reform where developing countries can participate and have their interests heard on an equal footing.”
“These three countries can play an important role, as part of the G77+China Group, to urge the establishment of an international tax body. They should help to guarantee broader participation of all countries in tax justice,which will not only help to solve the tax problem in their countries, but also benefit all developing countries” said Siti Khoirun Nikmah, another co-author of the study.