How Fiscal Justice can CONTRIBUTE TO REDUCE INEQUALITY Catherine Olier– Accra February 2014

FISCAL JUSTICE: 3 “sides” of the coin Progressive and fairer tax revenues + Governance Acc Transparency + Redistributive public expenses: ES

Page 3 EVIDENCE THROUGH EXAMPLES: ICELAND

Page 4 EVIDENCE THROUGH EXAMPLES MEXICO: the expansion of basic social programs and effectively targeted direct monetary transfers have increased the progressivity of Mexico´s fiscal system in recent years, but redistributive impact is limited by a comparatively ineffective tax system The wealthiest do not contribute their fair share: USD 18.5 trillion of wealth is hidden offshore by rich individuals resulting in a tax loss of USD 156 billion every year. USD 950 billion of illicit financial flows left developing countries in This represent an increase of almost 14% compared to the previous year. It cost a net loss of USD 100 billion taxes to developing countries every year.

Page 5 1.Income inequality has increased everywhere. 2.In advanced economies, fiscal policy has played a significant role in reducing income inequality (through progressive income taxation and social expenditures) 3.To improve fiscal policies, we need tax and spending measures such as:  reducing tax evasion and avoidance,  increasing the progressivity of income taxes,  expanding corporate and personal income taxes  reducing tax exemptions EVEN THE IMF IS TALKING ABOUT FISCAL JUSTICE!

Page 6 OXFAM’S APPROACH Everyone should pay taxes according to their means and where some do not escape taxation If so, it is a powerful policy lever (together with quality public services and effective governance) to reduce inequality and ensure fairer society.

DOMESTIC REVENUES GOVERNANCE: TRANSPARENCY + ACCOUNTABILITY SOCIAL EXPENDI TURE TOWARDS FISCAL JUSTICE NATIONAL MOBILISATION INEQUALITY REDUCTION TAX REFORMS TRANSPARENCY HEALTH EDUCATION GLOBAL SOLUTIONS TO NATIONAL PROBLEMS BUDGET MONITORING

Page 8 “Injustice anywhere is a threat to justice everywhere” Martin Luther King