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Ta x a t i o n : F u n c t i o n s a n d p r i n c i p l e s Commonwealth Governance Handbook 2013/14 73 (£12 trillion) held by individuals in tax havens is held in British Overseas Territories and Crown Dependencies. If properly collected, avoided tax payments could make a significant difference to development efforts. Richer countries would have higher tax revenues and there may be positive consequences of that for international flows of money. Tax avoidance in developing countries also deprives governments of the ability to better deliver their obligations. Multinational companies have been accused of removing profits from countries where they operate so that tax cannot be levied. In Zambia, Vice President Scott estimates that $2 billion each year is lost to his country through corporate tax avoidance. These are meaningful and important amounts for developing countries seeking to serve their people. Both international tax arrangements and the will of governments to address practices can make a difference to tax revenue, international flows of money and the capacity of developing countries to deliver for their people. Tax and rights It is through tax revenues that governments are able to deliver services and infrastructure projects to their people. Roads, schools, hospitals, street lighting, sewage, clean water and elections tend to be public sector initiatives; those which do not have scope to be profit making will remain so. States have obligations to ensure steps are taken such that there is progress towards the realisation of the rights guaranteed in international treaties – these include the right to adequate housing, clean water, sanitation and the highest attainable standard of health. This is subject to the use of the maximum of their available resources – that includes the best use of public money: tax revenues. There is limited discussion of the links between taxation and the realisation of rights. This is problematic: even if the state is not the main delivery channel – some schools are likely to be privately owned, for example – the state is likely to be approving, monitoring and regulating the provision of such services when done by private actors. Even a minimalist role will require tax revenue maximisation through the efficient collection of moneys from individuals and corporations. Conclusion Far from being a dirty word, tax is the oil that enables our governments to provide services and undertake infrastructural development. Opaqueness about how taxes are collected, how much they amount to and how they are spent can undermine the buy-in of citizens to tax systems. It can also affect the credibility of politicians and of systems in the public mind. Transparency can be built in many ways – the example noted here is just that, an example. It is simple, clear and accessible to anyone with an internet connection. The pace of IT growth in many countries in the south is remarkable. This example may well be one that can be modified for appropriate local use. Besides the issue of local legitimacy, tax systems are under scrutiny for the inbuilt loopholes that enable the wealthy to remove themselves from tax obligations, whether locally or on an international level. In recent years, there has been increasing agitation and concern about the significantly reduced ability of governments to meet the needs of the poor or vulnerable due to such lost income streams. NGOs, activists and politicians are clamouring for change. If poverty is to be adequately addressed, there needs to be a tightening of systems that deliver for them rather than protect the wealthy. We need to talk about tax, services, revenue maximisation and the realisation of rights. Tax is critical and we must make the most of it. Dr Purna Sen is deputy director of the Institute of Public Affairs at the London School of Economics and Political Science (where she was founding director of the African Leadership Programme), and was previously director for the Asia-Pacific Programme at Amnesty International, before serving as head of human rights at the Commonwealth Secretariat. Her interests include violence against women, culture and human rights, trafficking, sexuality and sexual control, and race equality in the UK. Dr Sen has also taught gender and development at LSE, and consulted for many organisations including Article 19 and the British Council. She is chair of the board of the Kaleidoscope Trust, a board member of RISE and an advisor to Justice for Gay Africans.


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