In the wake of the unprecedented COVID-19 crisis, tax systems should be reformed, and tax avoidance and evasion reduced, to ensure an economic recovery in which everyone pays their share, says the International Monetary Fund (IMF).
Taxes pay for many of the things that are fundamental to functioning societies across the world, such as schools, health care, and social services. Money raised through taxation is crucial to ensuring that these services are maintained during the COVID-19 crisis. But, when businesses shut down, and millions lose their jobs, as has happened during the current crisis, tax revenue plummets.
In the short-term, governments have put together stimulus packages, and a wide array of measures to help businesses and citizens get back on their feet. The IMF is tracking these efforts, which range from a $540 billion European Union package, which includes funding to help the hardest-hit states; to a ‘cash for work’ program in Cambodia; and, in Samoa, a six-month reduction in private utility bills.
At the same time, the IMF has made emergency COVID-19 funding available, particularly to those countries with developing economies. The IMF has made some $250 billion available, in the form of financial assistance and debt service relief, to some 77 member countries.
For example, In April, the IMF approved Afghanistan’s request for an emergency assistance package of approximately $220 million, to help the country cope with the disruption to trade, which has led to heavy damage to the economy.
Bangladesh, which has been badly hit by plummeting demand for one of its main exports, clothing, received emergency assistance worth some $732 million in May. Also in May, to avoid what the IMF characterized as “immediate and severe economic disruption” resulting from the pandemic, Egypt received a package of more than $2.7 billion, to help alleviate some of the most pressing financing needs, including for spending on health, social protection, and supporting the most impacted sectors and vulnerable groups.
But, in the longer-term, these stop-gap measures will not be enough to fix many of the underlying problems of the global economy, which include growing inequality within countries, and the ability of multinational enterprises to legally minimise corporate taxes.
The progressive approach
Victoria Perry, Deputy Director of the IMF’s Fiscal Affairs Department, and an expert on taxation, told UN News that, in planning the post-pandemic recovery, countries should look at dealing with inequality by implementing more progressive tax systems: “this means that the average tax rate rises, along with income. The extent of the tax burden for richer people is for each country to decide, but it is certainly problematic when effective tax rates for better off people are lower than for poorer ones. It is also often the case that better off people, with access to tax advice and more complex financial affairs, can make better use of exceptions or loopholes in the tax system than those who rely only on wages. Closing such options can make for a more equitable system and — depending on the country — can be more important than structural reforms of tax rates.”
Before the COVID-19 pandemic, the growing gap between rich and poor was already a cause for concern. Whilst inequality has fallen between countries, with some countries, such as China, making huge strides in raising overall income levels in recent decades, inequality within countries appears to be rising. For Ms. Perry and the IMF, personal income taxes play a leading role, when it comes to determining the progressivity of the tax system.
Ms. Perry adds that another option for some developing countries, which have trouble raising and enforcing a personal income tax, is to look at taxing property: “whilst income is relatively easy to hide, luxury homes are very visible, and a tax-free threshold means that owners of cheaper homes can be exempt or relieved from paying it”.
Income inequality differs widely across countries, but studies show that creating a fairer society, is not only about redistributing wealth, but, as Ms. Perry explains, putting in place policies that help people to gain sustainable, decent work: “Globalization has affected all open economies, but countries with effective redistributive tax and benefit systems have been able to avoid sharply rising inequality. However, redistribution on its own is not enough. It has to go hand-in-hand with a host of other measures, such as retraining, and job support”. In thinking about equity, then, it is important to look at both sides of the equation—not only taxes, but how the money is spent to improve lives.
Getting to the source of the issue
Some studies have calculated that, in richer countries, some 10 per cent of corporate tax revenue is lost to tax avoidance by multinationals. Developing countries are estimated to lose even more, in proportion to the national incomes.
“Another problem is that the international tax system may shift the tax base away from the ‘source’ country, says Ms. Perry. “So, if a mining company has its headquarters (residence) in a richer country, but operates mines in a less-developed economy (the source), the source country may not get the lion’s share of the tax revenue. When we talk about ‘fair and equitable distribution’, many observers are talking about ensuring that source countries get a better deal. The current international debate over taxing major digital tech companies, many of which are headquartered in the US, is similar, but the “digital” economy is even harder to address. Even though they’re doing business and making money all over the world, where the presence is virtual rather than physical, countries are not allowed to collect tax revenue on the income, under the current system”.
“We are going through this huge economic crisis, and countries are having to make major adjustments to their economies. But inequality is also a kind of huge global problem in itself. This is also then an opportunity to change tax systems for the better, to make them fairer and more equitable, and to promote economic activity that is less polluting, less dominated by industry with a large carbon footprint, and more sustainable.”
Pandemic highlights importance of indigenous self-determination
The COVID-19 pandemic has underscored the need to ensure the world’s indigenous people have control over their own communities, the UN High Commissioner for Human Rights has affirmed.
Michelle Bachelet described the pandemic as “a critical threat” to indigenous communities everywhere, at a time when many are also struggling against man-made environmental damage and economic depredation.
“Overall, the pandemic hammers home the importance of ensuring that indigenous peoples can exercise their rights to self-government and self-determination”, she said in a message for the International Day of the World’s Indigenous Peoples, observed this Sunday.
“This is about saving lives and protecting a precious web of cultures, languages and traditional knowledge, that connect us to the deep roots of humanity.”
Among the world’s poorest
There are roughly 476 million indigenous people worldwide, according to UN estimates.
Although less than five per cent of the global population, they account for 15 per cent of the poorest people on the planet.
Ms. Bachelet noted that many indigenous communities have “deeply inadequate” access to health care, clean water and sanitation, while their communal way of life can increase the probability of rapid contagion.
Ancestral knowledge lost
The UN rights chief said more than 70,000 indigenous people across the region have been infected to date, including almost 23,000 members of 190 indigenous peoples in the Amazon basin.
“Over 1,000 deaths have been recorded, including several elders with deep knowledge of ancestral traditions”, she added. “They include the tragic death in Brazil this week of chief Aritana, of the Yawalapiti people.”
Lives under threat
The Amazon spans nine countries and Ms. Bachelet noted that indigenous communities in the vast region live on lands that are increasingly damaged and polluted due to illegal mining, logging and slash-and-burn agriculture.
Despite measures to contain COVID-19 spread, such as movement restrictions, many of these activities have continued, alongside movements by religious missionaries which also expose the indigenous to the risk of infection.
Meanwhile, those indigenous people who live in voluntary isolation from the modern world may have particularly low immunity to viral infection.
Ms. Bachelet said indigenous communities must have a role in pandemic response, stressing that “they must also be consulted, and should be able to participate in the formulation and implementation of public policies affecting them, through their representative entities, leaders and traditional authorities”.
Rights experts call on India to remedy ‘alarming’ situation in Jammu and Kashmir
UN-appointed independent human rights experts have called for urgent action in India’s Jammu and Kashmir, amid concerns of ongoing abuses against civilians there.
The appeal comes a year after the Indian Parliament revoked the special status of Indian-administered Jammu and Kashmir, which provided partial autonomy and specific protections to its mainly-Muslim citizens.
In a statement, the group of 17 experts said that the human rights situation in Jammu and Kashmir has been in “free fall”.
International community urged to ‘step up’
“Urgent action is needed”, they said. “If India will not take any genuine and immediate steps to resolve the situation, meet their obligations to investigate historic and recent cases of human rights violations and prevent future violations, then the international community should step up.”
Twelve months ago, they wrote to the Indian authorities to end what they called “the crackdown” on freedom of expression, access to information and peaceful protests over the decision to end the state’s special status.
The experts also expressed concern about alleged arbitrary detention, torture and ill-treatment, to which the Government recently replied, as well as the criminalization of journalists covering the situation and the detention and deteriorating health, of a high-profile human rights lawyer.
“We have yet to receive any reply to three of the four letters,” the experts said.
COVID compounding detentions, restrictions
During the COVID-19 pandemic, the experts also said it was concerning that “many” protesters are still in detention, and that internet restrictions remain.
They added that the closure of the Jammu and Kashmir State Human Rights Commission last October, was equally disturbing, as it removed one of the few ways that victims of rights violations could seek remedy.
No information had been provided about what would happen to the ongoing cases the commission had been investigating.
These include hundreds of suspected enforced disappearances dating from as far back as 1989, they said, while allegations regarding thousands of unmarked and some mass graves sites, have also not been properly investigated.
In 2011, India also extended an open invitation to Special Rapporteurs to visit, but has several requests pending. “We call on India to schedule pending visits as a matter of urgency, particularly of the experts dealing with torture and disappearances,” they said.
The Special Rapporteurs and Working Groups are part of what is known as the Special Procedures of the Human Rights Council. The experts work on a voluntary basis; they are not UN staff and do not receive a salary. They are independent from any government or organization and serve in their individual capacity.
75 years after the bomb, Hiroshima still chooses ‘reconciliation and hope’
In a video message delivered to a Peace Memorial Ceremony in Japan on Thursday, UN Secretary-General António Guterres has paid tribute to the victims of the atomic bombing of Hiroshima, which devastated the city in 1945.
“Seventy-five years ago, a single nuclear weapon visited unspeakable death and destruction upon this city”, he said in his address. “The effects linger to this day”.
However, he noted that Hiroshima and its people have chosen not to be characterized by calamity, but instead by “resilience, reconciliation and hope”.
As “unmatched advocates for nuclear disarmament”, the survivors, known as hibakusha, have turned their tragedy into “a rallying voice for the safety and well-being of all humanity”, he said.
The birth of the UN in that same year, is inextricably intertwined with the destruction wrought by the nuclear bombs that fell on Hiroshima and Nagasaki.
“Since its earliest days and resolutions, the Organization has recognized the need to totally eliminate nuclear weapons”, Mr. Guterres said. Yet, that goal remains elusive.
Dwindling arms control
The web of arms control, transparency and confidence-building instruments established during the Cold War and its aftermath, is fraying, said the UN chief, and 75 years on, the world has yet to learn that nuclear weapons diminish, rather than reinforce security, he warned.
Against the backdrop of division, distrust and a lack of dialogue along with States modernizing their nuclear arsenals and developing new dangerous weapons and delivery systems, he fears that the prospect of a nuclear-weapon-free world “seems to be slipping further from our grasp”.
“The risk of nuclear weapons being used, intentionally, by accident or through miscalculation, is too high for such trends to continue”, the UN chief added, repeating his call for States to “return to a common vision and path leading to the total elimination of nuclear weapons”.
‘Time for dialogue’
While all States can play a positive role, the countries that possess nuclear weapons have a special responsibility: “They have repeatedly committed to the total elimination of nuclear weapons”, Mr. Guterres reminded.
“Now is the time for dialogue, confidence-building measures, reductions in the size of nuclear arsenals and utmost restraint”.
Calling for the international non-proliferation and disarmament architecture to be safeguarded and strengthened, the UN chief cited next year’s Review Conference of the Treaty on the Non-Proliferation of Nuclear Weapons, as an opportunity for States to “return to this shared vision”.
He also looked forward to the Treaty on the Prohibition of Nuclear Weapons entry into force, along with that of the Comprehensive Nuclear-Test-Ban Treaty, which he said “remains a top priority in order to entrench and institutionalize the global norm against nuclear testing”.
The commemoration took place in the shadow of the COVID-19 pandemic, which the Secretary-General said has exposed so many of the world’s fragilities, “including in the face of the nuclear threat”.
“The only way to totally eliminate nuclear risk is to totally eliminate nuclear weapons”, he spelled out.
“The United Nations and I will continue to work with all those who seek to achieve our common goal: a world free of nuclear weapons”, concluded the Secretary-General.
Recommit to disarmament
There truly is no winner in a nuclear war, Tijjani Muhammad-Bande President of the UN General Assembly told the ceremony.
“We must recommit to nuclear disarmament for there will never be a justification for the decimation caused by nuclear weapons”, he emphasized, urging everyone to “work relentlessly” to do so.
Calling the Treaty on the Prohibition of Nuclear Weapons “a milestone agreement” in nuclear disarmament, he called on all Member States to sign and ratify it.
“In memory of the victims of Hiroshima and Nagasaki…let us work together to create the future we want: a future which is free from the existential threat of nuclear weapons”, concluded the Assembly president.
Meanwhile, the head of the Comprehensive Nuclear-Test -Ban Treaty Organization (CTBTO), Lassina Zerbo, said that the devasting blasts continue to “haunt humanity and raises a challenging question: Can we ever escape the destructive instinct that led to these horrific bombings”?
Calling the hibakusha a “forceful moral compass for humanity”, he maintained that their pain and stories have made nuclear risk more “perceptible and concrete”.
According to Mr. Zerbo, the hibakusha have taught that patience, determination and resolution are “indispensable in the long battle towards nuclear disarmament”.
“We must finish what we started because what happened in Japan must never happen again”, he said, adding,“we must hear them so we can act”.
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