Those at the coal-face, those sitting in influential boardrooms and those who teach in prestigious lecture halls, came together to discuss the complexities of international tax justice and its link to poverty, at an international conference held in Nairobi. Anthony Egan SJ takes stock.
The Nairobi conference on Tax Justice which ended on 14 March 2019 produced important findings. These reflect a need for concerted and coordinated effort by governments, civil society (including the churches), business and individuals to stem the massive loss of revenues caused by tax evasion and tax avoidance. While a few key points emerged, a number of issues needed further examination.
First, empirical evidence suggests that while tax injustice was particularly acute in developing countries, it is a common global problem that needs to be addressed both at national and international levels.
Second, the good news is that there are a number of protocols and practices in place that can help.
The 2015 Addis Ababa Action Agenda (AAAA), with its holistic focus on financing and sustainable development, includes taxation as one of its key strategies.
A number of speakers also noted the importance of the OECD’s interconnected approach to tax and development, which includes a series of tools that can be implemented to counter tax evasion as well as its Tax Inspectors Without Borders (
Third, the conference revealed a growing consensus among nations that fair and equitable tax regimes are a necessary part of promoting human rights and the common good. While not all major countries subscribe to this, there is general agreement that sound and fair taxation is the basis for creating a decent society for all citizens.
The conference also revealed tensions and obstacles that need to be addressed.
First of these is what might be called matters of definition. Some speakers conflated tax avoidance — which, depending on national laws, is a legal way of avoiding taxation — and tax evasion, which is illegal. They were challenged to make a distinction between legal and moral categories. One observer noted that if avoidance was considered ‘criminal’, efforts should then be made to change laws to make it so in fact.
The second obstacle can be summarised as a matter of political will. Do politicians have the will to make legislation, tighten tax loopholes and ultimately see that laws are implemented? Here many noted the need for the constant lobbying of civil society organisations including the religious community. Zambia MP Felix Mutati summed this up neatly, saying “Politicians change when you talk to them…Talk to me.”
The third obstacle, related to the second and one that I thought was least well addressed, was corruption’s impact on taxation and tax observance. Though alluded to time and again, this seems to be one of the single greatest obstacles to tax justice in many countries.
Corruption attacks tax justice at multiple levels. At the level of policymaking, it can influence players to adopt tax regimes favourable to those doing the bribing. At the level of implementation, it can see large amounts of tax income siphoned off into the pockets of officials — and not into projects promoting greater justice and wellbeing for the poor. And at the level of those being taxed, knowledge that one’s tax contributions are being often at best mismanaged and at worst stolen is the single greatest disincentive for taxpayers (individuals or corporate) to pay-up.
This last point alone needs closer attention by those who participated at the Nairobi Conference. And the Church’s role — as advocate, moral witness and moral agent — in this regard cannot be overestimated.