A/HRC/44/40 C. Move beyond the aid debate and promote tax justice 67. Since the 1950s, debates over a just international order have focused heavily on official development assistance (ODA) from the North to the global South. In 2019, thirty OECD countries provided $152.8 billion, in the form of grants or low-interest loans.119 While such funds are vital, they pale in significance against the overall balance sheet. Low- and middle-income countries pay $756 billion annually in principal repayments and $213 billion in interest on an overall external debt of $7.8 trillion. 120 Following centuries of colonial exploitation, developing countries continue to be net providers of resources to the rest of the world.121 Large-scale debt forgiveness is necessary, especially in the wake of COVID-19. 68. Social justice commitments are nowhere better reflected than in the fiscal system, and coordinated global tax reform that reduces mass avoidance and evasion will be crucial. Fair and equitable taxation can lay the foundations for a society that respects and promotes wellbeing for all. Yet the terms ‘taxation’ and ‘fiscal’ appear but once in the 2030 Agenda. The assumption seems to be that those issues only relate to the challenge of financing. But, taxation, both as a symbol of solidarity and burden-sharing, and as a reflection of deeper values, must be front and center in any set of policies to eliminate poverty. International policies fall far short of entrenching even a thin notion of tax justice, either at the national or international level. In many African countries, individuals in the bottom 40 percent of income pay more in taxes than they receive in cash benefits through subsidies and direct transfers.122 69. Low tax revenue has hobbled the capacity of governments to undertake redistributive policies. 123 In 2015, multinationals shifted an estimated 40 percent of their profits to tax havens124 and global corporate tax rates have fallen from an average of 40.38 percent in 1980 to 24.18 percent in 2019.125 There are now hundreds of thousands of tax havens worldwide,126 depriving states of as much as $650 billion in tax avoidance by multinationals, with developing countries losing an estimated 6-13 percent of their total tax revenue as a result.127 70. The United States has been the global trendsetter in reducing corporate, personal, and estate taxes over the past four decades, popularizing techniques that enable massive tax avoidance and facilitate the proliferation of global tax havens. The result is that many billionaires in the US pay a lower overall tax rate than anyone else.128 71. International cooperation and tax reform is necessary, but a crucial first step is transparency. A common set of indicators for tracking income and wealth should be prioritized in the next revision of the UN System of National Accounts. Governments should publish income, wealth, and effective tax rates of top earners, and require multinationals to publish country-by-country reporting data. D. Implement universal social protection 72. Innumerable reports have characterized social protection as an indispensable foundation for reducing poverty and achieving the SDGs. 129 Yet most governments remain 119 120 121 122 123 124 125 126 127 128 129 16 UN, “Global ODA, and aid for least developed countries, recovers in 2019.” World Bank, International Debt Statistics (2020), p. 17. Global Financial Integrity, Financial Flows and Tax Havens: Combining to Limit the Lives of Billions of People (2015), p. 15. World Bank, Accelerating Poverty Reduction in Africa (2019), p. 265. Emmanuel Saez and Gabriel Zucman, The Triumph of Injustice (2019). Thomas Tørsløv, et al., “The Missing Profits of Nations,” National Bureau of Economic Research, 22 April 2020, p. 27. Tax Foundation, Corporate Tax Rates around the World, 2019, p. 2. Saez and Zucman, Triumph of Injustice, p. 64. Alex Cobham and Petr Jansky, “Global Distribution of Revenue Loss from Corporate Tax Avoidance: Re-estimation and Country Results,” Journal of International Development, vol. 30 (2018), pp. 207, 221. Emmanuel Saez and Gabriel Zucman, “How to Tax Our Way Back to Justice,” The New York Times, 11 October 2019. UN DESA, Promoting Inclusion through Social Protection: Report on the World Social Situation