Tax Academy Presentation- Taxation and Rights - Joel Odigie

8/10/2019 Tax Academy Presentation- Taxation and Rights - Joel Odigie

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International Tax Academy

NairobiKenya

30 November6 December, 2014

Akhator Joel ODIGIE

ITUC-AfricaLome- Togo


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African Trade Union and Tax justice

ITUC-Africa based in Lome- Togo is a workers

organisation representing over 17 million due-

paying workers in 49 African countries

Tax justice campaign represents another strugglebeyond ...Bread and butter issues

Tax justice not entirely new- PAYE and VAT

struggles TUs have been involved in linkages issues- trade

and investment (sttuggle for policy space)


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Our understanding of tax and Tax justice It is neither an isolated development nor a one-off

campaign...linkages to different development issues and at

different levels... For instance- we see a direct link to Africas

industrialisation ....as anchored within the Africa MiningVision...

It is one of the means to slow-down neo-liberalcapitalism Ex:FTT

...meaning it is ideological...

Resource mobilisation means to run public administrationto meet citizens expectations and aspirations

Democracy and participation- accountability issues

Each paying according to his genuine means and ability-progressive tax (struggle against taxing essentialcommodities)


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Redistribution beyond taxation

the multidimensional crisis we are in, the colonial-apartheid gap in the division of the national incomebetween profits and wages should be drasticallynarrowed in South Africa. This gap is far too big to benarrowed only through the secondary redistribution ofincome that taxation provides.

Furthermore, it is an income distribution gap betweenlabour and capital that cannot be rationalised with aneed for investment argument- (Forslund 2014)


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Note that the argument that taxation is not enough to address wage redistribution crisis is becausein most cases, MNCs will always seek huge profit share by paying little taxes and continue todepress wages...

"As for corporate income tax (CIT) in 2009, R45.3 billion, or a little more than one third of the R123billion in profits, was regarded as taxable income in the minority of mining companies that reporteda positive result to the tax authority. Out of those taxable profits of R45.3 billion, R12.8 billion, or28 per cent, was required to be paid in CIT (SARS 2011: 93)in effect a tax of a little more than 10per cent on the R123 billion in profits (gross operating surplus). The tax statistics show that this is a

normal state of affairs.When subtracting R12.8 billion in taxes from R123 billion, R110.2 billion is left at the politicaldisposal of the owners with majority shares.7 They reinvested R64.1 billion in the mining businessduring 2009 (SARB 2011: S-114). This leaves R46.1 billion not ploughed back into production in2009.8We can conclude that an additional R8 billion paid out, on average, in higher wages each and everyyear between 2001 and 2011 should not have had any objective impact on mining investments, andwe abstract from this proposition the subjective factor of the business community, in the samemanner as the effects on productivity and labour relations are, as a rule, not taken intoconsideration when proposing wage compression. By means of a sketchy but illustrative calculation,we use the principle of an equal rise for all in rands. This is usually not demanded by the unionsalthough increases in percentages widen the inequality among their members."


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What is Decent Work?

Rise of neo-liberal orthodoxy

Globalisation- growing global wealth for Africa increasing

growth but increasing poverty and inequality need for a fairglobalisation

Decent work on four pillars

- Employment generation: work is a defining feature of human existence.It is the means of sustaining life and of meeting basic needs. But it is also the

activity through which individuals affirm their own identity, both tothemselves and to those around them. It is crucial to individual choice, to thewelfare of families and to the stability of societies.

- Rights at work: freedom of association, collective

bargaining, etc- Social protection: Social Protection Floors (ILO

Recommendation 202), and

- Social dialogue: consultation and participation


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Tax for what?

Tax is powerful. A fair tax system:

Pays for public services and social protectionschools, hospitals, roads, water, social security,pensions, job training

Reduces inequalitythe gap between rich andpoor within countries and between countries

Increases accountability of state to citizens andreduces dependence on foreign aid


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Signals economic and political capacity of a country

to generate sustainable resources that render thepublic funding of extending social protection viablein the long term.

From a fiscal standpoint, financing for Social

Protection like any other public policy objective hastwo facets;

a) A government's ability to generate new internal orexternal resources on a sustainable basis,

b) The efficiency with which these resources are usedto achieve a given stateswelfare goals

Both processes are technical and political


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Using Tax to promote Decent Work:

Social protection Floors In order to ensure effective access to essential health care

and basic income security throughout the life cycle,national social protection floors should comprise at leastthe following social security guarantees, as defined at the

national level: Access to essential health care, including maternity care;

Basic income security for children, providing access tonutrition, education, care and any other necessary goods

and services; Basic income security for persons in active age who are

unable to earn sufficient income, in particular in cases ofsickness, unemployment, maternity and disability;

Basic income security for older persons.


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Tax can fund Social Protection Floors

benefits if not missing We all pay tax, but right now, big companies arent

paying as much as they should in developingcountries.

Tax incentives: ActionAid estimates that eliminatingcorporate tax incentives in developing countriescould raise over US$138 billion in revenue annually.

Tax avoidance and evasion: developing countries areestimated to lose between US$120 and US$160billion a year in revenue owing to money hidden intax havensmore money than they receive in aid.


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Consider the impact of tax breaksUganda: UShs 690 billion in 2009/10, twice health

budget of UShs 375 billion for 2008/09.

Tanzania: TShs 381 billion in 2008/09-2009/10.

Rwanda: Rwf 141 billion in 2009, 4.7% of GDP in

2009, nearly double education spending.Kenya: KShs 100 billion every year amount tomore than twice entire health budget of KShs 41.5billion.

Zambia Sugar/ABF: cost Zambia US$17.7 millionsince 2007. Thats 14 times more than thecountry received in UK aid to combat hunger-Source ActionAid


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Using tax to promote decent work

I am a teacher. I work for 5,000 Kenyan shillings (EUR 45) per

month. It is a disgrace, that there is a huge need for teachers like

myself, but no public funds to pay us. Eventually God will pay me

back, what the Government refuses to give us.

Jane Irungu, Raila Educational Center, Kibera informal

settlement, Nairobi, Kenya. Source: ActionAid


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social protection benefits are lost to

people and suffering on the rise

The over US$138 billion (the amount currently given awayin corporate tax incentives) could:

Pay for the education of 57 million children who currentlydont go to primary school

AND provide the agricultural investment (US$42.7 billion)

needed to achieve a world free from hunger.

ANDmeet international goals to reduce ill health morethan twice over (costing a maximum of US$58.9 billion).


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What we (TU) have do so far

Part of the global trade union campaign for the

Robin Hood tax since 2010IFF 2013- ITUC-Africa General Council Resolution to

pursue Tax Justice as a means of financing Africasindustrialisation and social development

Entering into alliance with progressive CSOs:Alliance-building- 2013

2014- hitting the ground running: getting familiarwith Tax Justice jargons; building networks;

developing regional and national Action Plans Building an African Tax Justice Think-tank- work in

progress

2014-2015: Campaigns


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ITUC-Africa 2013 Communiqu The forum therefore agreed to mobilise African

workers and organisations such as the Sub-regional organisations (EATU; SATUCC); Global

Union Federations in collaboration with

progressive movements such as Tax JusticeNetworkAfrica and ActionAid International

under an advocacy tax justice campaign to fight

to defeat and end harmful tax incentives, tax

dodging, illicit financial flow, assets theft and tax

haven so as to increase chances for domestic

resource mobilisation


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What the International Trade Union

Movement is doing on Tax Justice

Education International (EI) campaigning on tax justice toimprove public education for several years.

Public Services International (PSI) working with EI andother global unions in the Quality Public Services-ActionNow!campaign, which stresses the need for fair taxationto provide the funding for public services.

PSIworked since 2011 with the ITUC to join the FinancialTransactions Tax (Robin Hood Tax) campaign. Unions inthe United States, Canada, Europe, Brazil, and South

Africa joined in.


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How we want to continue to work1. Having a social protection analysis: showing how

corporate tax dodging takes money away from governmentsability to provide social security & public services: Research

2. Targeting workers to join the campaign:specific messaging,story-telling & engagement tools: Mobilisation & Campaign

3. Connectingthe movements:joint campaign activities bytrade unions and the Tax Justice movement:Alliances andCollaborations

4. Amplifying workers demands for tax justice:their voices,

spokespeople, their alternatives: Advocacy

5. Broadening the framing of the issues beyond, but includingtaxation (linkages to other issues such as trade and investmentagreements): Framing


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Some activities for 2015 Build and increase public Awareness for the

Mbeki Panel report on IFF

Target Parliaments as part of advocacy

Use social media more to increase aware of

and the demand for Tax Justicehttps://www.facebook.com/groups/38155201

5323160/

Continue to mainstream Tax Justice onNational and International commemorative

days
https://www.facebook.com/groups/381552015323160/https://www.facebook.com/groups/381552015323160/https://www.facebook.com/groups/381552015323160/https://www.facebook.com/groups/381552015323160/https://www.facebook.com/groups/381552015323160/


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Our campaign demands:

Stop harmful tax incentives

End corporate tax dodging

Increase the transparency of governments and

big corporations in their handling of tax matters.

so as to increase public service delivery, defeat

poverty and inequality


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Conclusion People around the world, from the south to the north, are raising their

voices in a united demand:its time for tax justice.

Tax justice must be put into action to end poverty, inequality andclimate change.

Multinational corporations, financiers and the very rich must pay theirfair share of taxes.

Tax burden just like the austerity measures adopted to mitigateagainst the effects of the financial crisis MUST NOT BE ON THE POOR

Governments must enforce fair, progressive, transparent andsufficiently resourced tax administrations

National and international systems that support tax avoidance and taxhavens must be stopped.

Its time for the people of every country to receive our fair share in

public services and social protection.


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Merci beaucoup

[email protected];

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Tax Academy Presentation- Taxation and Rights - Joel Odigie