Wealth Tax for an Equitable Society

During WSF 2024, LDC Watch and SAAPE, in partnership with Asian Peoples’ Movement on Debt and Development (APMDD), Rural Reconstruction Nepal (RRN), and TAFJA Nepal organized an event titled Wealth Tax for an Equitable Society on 18 February 2023. The main objective of the consultation was to foster meaningful discussions among civil society members and activists to deepen understanding of progressive wealth taxation and its potential in raising revenue for public services as well as reducing economic inequality.

Major Highlights of the Session

Sujita Shakya, former Member of Parliament from Nepal, shared insights into the historical perspective of property taxation in Nepal. Property taxation law was introduced in Nepal in 1991, which was later amended in 2017. She highlighted a significant provision within the law: “It offers up to 50% rebate on registration when property is registered in the name of women.” Shakya underscored how this initiative aimed to promote equality in property ownership between men and women, representing a stride towards gender equality. She emphasised the importance of enhancing women’s access to resources as a means of fostering economic empowerment and reducing disparities between the rich and the poor. Apart from such provisions in support of women, challenges persist. These challenges, according to Shakya, include “limited transparency, widespread irregularities in tax practices, and tax evasion by the wealthy.”

She called for a re-evaluation of tax laws and administration to ensure that the wealthy fulfil their tax obligations and prevent them from evading taxes. “Implementing wealth tax as a resource pooling mechanism has good potential to address inequality effectively,” she stated. Shakya expressed solidarity in advocacy and lobbying efforts for wealth tax policies aimed at reducing the wealth gap and promoting a more equitable society. While Nepal lacks a distinct net wealth tax, she mentioned that property tax (house and land tax, malpot and bhumi kar) are levied progressively.

Similarly, John Lazaro from APMDD (the Philippines) highlighted the current ideological debate over the introduction of wealth taxation policy. The debate and resistance against implementing the wealth tax stem from concerns about potential limitations on investments and fears of double taxation. Despite these disagreements, it is crucial to recognise taxes as essential policy for a country, generating much- needed revenue for economic development. The shift from regressive to progressive taxation systems is pivotal in reshaping the tax landscape, particularly in Asian countries grappling with regressive tax structures. Essentially, discussions around taxation embody a political struggle for wealth redistribution and fairness in society.

JaibuNisha from Manitham Trust (India) underscored the gap created by regressive taxation and highlighted the urgency for equitable taxation practices. “In the search for fairness, it is imperative that taxation systems are designed to ensure that all individuals contribute proportionately based on their means,” JaibuNisha stated. The current state of unequal taxation, where the burden falls disproportionately on the poor, is morally indefensible. Countless individuals from underprivileged backgrounds have tragically lost their lives due to the inequities perpetuated by unjust tax structures. She emphasised that it is essential that a collective voice be raised to advocate for tax reforms that prioritise justice and equity to create a system where all members of society are treated equitably and burdens are shared fairly.

Ah Maftuchan from PRAKARSA (Indonesia) stated that civil society has emerged as a vocal advocate for fairer and more transparent taxation policies in light of current discussions on wealth tax. Exploring traditional taxation practices alongside contemporary challenges, there is a growing consensus on the necessity of implementing policies that promote wealth redistribution and combat financial opacity. Despite the momentum building around these initiatives, challenges remain, notably with the G-20 platform where affluent nations have shown resistance to proposals for progressive wealth taxation.

The intervention by Gershom Kabaso from the Zambia Social Forum (Zambia) delved into the impact of Foreign Direct Investment (FDI) and prevalent political interference in the extractive industry in the region. Kabaso emphasised the critical importance of fair and just taxation policies to ensure transparent and equitable distribution of the wealth generated from these resources.

In closing remarks, Farooq Tariq (Pakistan) emphasised that wealth tax should be viewed as an equitable measure that enforces more taxation on the wealthy. He framed wealth tax as a political issue, shedding light on the broader implications and power dynamics at play.

The session concluded with a variety of discussions on wealth taxation, highlighting the importance of implementing progressive wealth taxation to address economic inequities and cultivate a more humane economy. Overcoming obstacles such as tax evasion and opposition to progressive taxation, equitable tax policies are essential for creating a system where wealth is acquired and distributed more equitably. The consultation culminated in the issuance of a civil society statement advocating for fair taxation.

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