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Why women need tax justice

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Paradise Papers, one year on, Tax Justice, women and tax justice, global days of action, multinationals, #TaxJustice is when taxes are fairly raised and fairly spent. Women need #TaxJustice now.

The first week of November 2018 marks the one year anniversary of the release of the Paradise Papers – yet another high profile tax scandal that highlighted the human impact of global tax dodging, exposing the wealthy individuals and multinational companies who dodge taxes.

Organisations from every region around the world joined together to demand that our governments respond to #ParadisePapers by Making Multinationals Pay Their Share of Tax.

The Global Days of Action have provided an umbrella for diverse activities to increase public pressure on governments around the world to end large-scale corporate tax dodging.

The Paradise Papers revealed a stunning amount of examples of international tax dodging – both by multinational corporations and private individuals. But where are we at – one year after the scandal?

In summary, the international system for taxing multinational corporations is unchanged since the 2017 #ParadisePapers scandal.

In 2015, the Organisation for Economic Co-operation and Development (OECD) and the Group of Twenty (G20) agreed a package of measures to combat corporate tax avoidance called the Base Erosion and Profit Shifting (BEPS) package.

But unfortunately, this package failed to solve the problem, and while some loopholes have been closed, others were opened up.

Therefore, we don’t have the necessary international standards to solve the problem of corporate tax dodging. Despite the #ParadisePapers, no major new international measures have been taken.

The #ParadisePapers clearly illustrated that multinational corporations adjust their tax strategies to changes in the tax standards, and continue to avoid paying their share of tax: see for example the #ParadisePaper stories on Nike and Apple.

This is made possible by the fact that governments around the world continue to offer harmful tax incentives, unjust tax treaties and secret transfer pricing deals with corporations, all of which undermines international tax justice.

The problem if further exacerbated by the digitalisation of the economy, which is affecting all sectors, and has opened up new gateways for multinationals to avoid tax.

Meanwhile, corporate transparency remains at very low levels, and citizens are, for example, not allowed to know how much tax multinational corporations pay on a country by country basis.

As regards wealthy individuals who use international structures and tax havens to conceal wealth and dodge taxes, some important progress has been made since the #ParadisePapers.

The European Union has decided to introduce public registers of the real (‘beneficial’) owners of companies in the EU.

This is an important step forward in the fight to stop shell companies from being used to hide money.

But more remains to be done – there are still many countries around the world that provide tax dodgers opportunities to hide their money.

The international system for sharing information between tax administrations also still leaves room for improvement – in particular for the world’s poorest countries, which find it very hard to access the information they need to prevent international tax evasion by citizens from their countries.

Global Alliance for Tax Justice members and partner organisations around the world planned for the Global Days of Action to call on our governments to revitalise the efforts to make multinational corporations pay their share, and ensure funds raised through progressive tax policies are spent on ensuring quality public services for all.

Conservative estimates have found that one type of corporate tax avoidance alone is costing developing countries between USD70 billion and USD120 billion yearly, and globally, the lost tax revenue due to corporate tax avoidance has been estimated to USD500 every year.

The global scandal of tax dodging by multinational corporations is devastating our economies and depriving governments of the funds urgently needed to pay for public services vital to achieve human rights, including women’s rights, and sustainable development.

#TaxJustice is when taxes are fairly raised and fairly spent.

And women need #TaxJustice now because:

1 – #TaxJustice helps girls getting a better education.

Education is a fundamental right for all children. Yet around the world there are

124 million girls and boys out of school today. There is a significant gender gap – with 1 out of 8 girls (63.1 million) compared to 1 out of 9 boys (61 million) out of school. Many more leave school unable to read or write.

Education is one of the strongest tools a government has to reduce inequality, lifting up the poorest citizens and levelling the playing field. If all women completed primary education, maternal deaths are estimated to drop by two-thirds and child deaths would be cut by 15 per cent.

A progressive taxation and spending system can raise significant revenue. For example, Ecuador has tripled its education expenditure from USD225 million in 2003–2006 to USD941 million in 2007-2010 through effective tax mobilisation policies.

Publicly funded and provided education has the most transformative potential, as high levels of private participation in education can worsen social mobility, and undermine education’s inequality-busting potential.

Globally the annual financing gap is estimated at USD39 billion in order to reach universal education at pre-primary, primary and secondary levels in low and lower middle income countries.

2 – #TaxJustice helps reduce women’s and girls’ unpaid care burden.

Women’s and girls’ unpaid work is subsidising economic growth. Women spend 2.5 times more time performing unpaid care and domestic work than men, which has been valued at USD10 trillion a year, or some 13 per cent of global GDP.

Where states don’t have enough revenue to provide essential public services, it is more likely to be women who fill the gap with their bodies and time, reducing the time they have for education, paid employment and rest and leisure.

Similarly, as more women enter the world of work without state sponsored care support, the burden of unpaid care falls to other female members of the family. This can limit girls’ abilities to access education and other rights such as leisure time. This is particularly true in the case of women in poorly paid work who work long hours.

The state is not the only duty bearer – men have a responsibility to take care of their children, home and relatives just as much as women. But tax-funded public services, especially preschool provision, are effective measures to improve women’s rights to decent work, education, political participation and rest.

Globally one in two children is enrolled in nursery school. Many states, including Brazil, Liberia, Nigeria, Senegal and South Africa, have dedicated public funds for early childhood care, but the financing gap to meet actual needs is vast.

3 – #TaxJustice helps women get life saving health services.

Pregnancy and childbirth increase women’s need for life-saving healthcare, as does the endemic nature of violence against women and girls globally. Every day, women across the world die from preventable complications during pregnancy and childbirth. In 2015, the number of maternal deaths per 100,000 live births was estimated at 216 globally.

19 of every 1000 newborns don’t survive their first month after birth. African countries with extremely low tax collections suffer from the highest child mortality levels. Almost all maternal deaths occur in under resourced settings and can be prevented.

Many forms of violence against women and girls require a health care response including, but not limited to, acid attacks, sexual assault, female genital mutilation and intimate partner violence.

Nurses and doctors need more resources and face the largest funding shortages in poor rural areas and informal settlements in cities. Women and girls’ right to health is a human right and more tax-funded, public investment is desperately needed.

African Union leaders have committed to spending least 15 per cent of their annual budgets on health. If this became reality, they would put an extra US$29 billion towards life-saving healthcare each year.

4 – #TaxJustice helps reduce Violence Against Women and Girls.

Violence against women and girls affects one in three women in their lifetime. Almost half of all women who are murdered globally are killed by intimate partners or family members.

Women living in poverty in developing countries are the most likely to be exposed to sexual violence whilst on the streets. Public transport in particular is a big challenge.

In Bangladesh, 84 per cent of women asked said they have experienced insults or sexual comments, and more than half say they have faced sexual advances while travelling. In Brazil’s cities, two-thirds of women say they are afraid to travel alone.

It is reported that in São Paolo, Brazil, a woman is assaulted in a public space every 15 seconds; a matter which is further compounded for women who also happen to experience other forms of intersecting inequalities.

Tax-funded public services that focus on women’s rights can improve women’s safety in public places, by providing things like better policing, secure public toilets, street lighting and ticketing systems designed with women’s needs in mind.

Putting a stop to this violence is a mammoth task, as social norms and gender norms do not simply disappear when someone takes on a role within the government. Patriarchal norms can undermine, subvert and ignore women’s rights policy and practice – leaving services which respond to and seek to prevent and mitigate violence against women and girls chronically underfunded, or not funded at all.

Governments must invest in tax-funded public services to meet their international and national commitments on eliminating all violence against women and girls. Investments in preventative work that are timely and well integrated can bring enormous benefits to women and their communities.

Women’s rights’ organisations are chronically underfunded and significantly increased investment in these organisations is urgently required.

5 – When multinational corporations and the very rich don’t pay their fair share of tax, it hurts women most.

Poverty is sexist and so is the distribution of extreme wealth. Globally

9 out of 10 US dollar billionaires are men. Transferring and redistributing wealth through taxation has the potential to tackle systemic discrimination based on gender, race, age, sexual orientation, disability and socioeconomic status.

When countries don’t raise a progressive personal income tax, don’t tax income from investments, provide tax breaks to big businesses, or turn a blind eye to tax avoidance and evasion, a majority of the ‘savings’ are made by men.

Low-income countries raise about two-thirds of their tax revenue through indirect taxes such as consumption and trade taxes. In high-income countries these taxes play a much smaller part and only raise one third of the total tax revenue on average.

Indirect taxes don’t have the redistributive power that income taxes have and risk hitting women living in poverty the hardest if items like food, children’s clothing and soap aren’t exempt. In sharp contrast, less than five percent of the population in developing countries pays personal income tax. This way of collecting taxes fail the poorest women, as opportunities to reduce economic inequality between wealthy men and women living in poverty are lost.

Every year, governments in developing countries give away an estimated additional USD138 billion in tax breaks to companies.

In addition, these countries losses to tax avoidance are estimated in the hundreds of billions of US dollars every year.

The tax havens that play a key part in this drain on public resources also enable the illicit financial flows resulting from trafficking in women.

As our financial system continues to provide opportunities to hide and launder proceeds of crime, and male-dominated elites continue to avoid or evade paying their fair share of taxes, women and girls pay the highest price with their bodies and their time when public services are starved of funding.

6 – #TaxJustice helps access to clean water that keeps women safer and builds their economic power.

Water is recognized as a basic human right and hence all citizens must have access to clean and safe water in adequate quantities. Regions which experience acute water shortages are therefore expected to invest in programmes that will improve access to water and reduce the mean distance to the nearest water point.

Where there are no public water services, women and girls most often carry the burden of getting water to their homes at whatever human cost, making them vulnerable to violence, and keeping them away from education and other work.

Access to public water is vital for women’s economic autonomy.

7 – #TaxJustice provides social protection for women.

Women face various protection risks because of their vulnerabilities. Social protection programmes are therefore effective in contributing to protection and realization of women’s rights including in sexual and reproductive health.

However, coverage of social protection is usually limited and more needs to be done to increase coverage to match the actual need. Social protection programmes have previously been affected by lack of coordination as different agencies and development partners implement different programs.

Reducing vulnerability and poverty is a key element of many social protection programs as no society can gain social cohesion if significant sections of the population live in abject poverty and therefore countries need to increasingly providing social protection programs in form of safety net programs for the most vulnerable and marginalized women in the community

For more information, see the Fact Sheets for the #ParadisePapers Week of Action.

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