During the first week of May, a meeting is taking place in which organizations and experts will build proposals with a view to the First Latin American and Caribbean Summit for a global, inclusive and sustainable taxation, to be held in July in Cartagena.

The year 2023 began with long-awaited news for the global tax debate. The government of Colombia announced the holding of a Summit for global, inclusive, sustainable and equitable taxation, the first of its kind in the region. The Initiative for Human Rights in Fiscal Policy, from which Dejusticia is a member, supports the holding of this Summit, as it is an important step towards the construction of a tax pact for Latin America and the Caribbean and an excellent opportunity for governments to consolidate a tax bloc with greater joint power in international negotiations.

Prior to the Summit, which will take place on July 27 and 28 in the city of Cartagena, the Colombian Ministry of Finance, with the technical support of Fedesarrollo, called on academia, business, civil society and any interested individual to send summaries defining the type of problems that prevent the construction of a comprehensive, inclusive, sustainable and equitable tax system. These summaries will be included in a policy brief that will be delivered to the governments attending the Summit, while the general public will be able to access them through a digital repository in Spanish and English.

In fact, several summaries were sent from the organizations that are part of our Initiative for Human Rights in Fiscal Policy. Dejusticia, from Colombia, made two proposals: one on the basis of human rights to achieve better global taxation and the other on access to tax information as a human right. Nathalie Beghin, from Inesc, sent a document related to tax incentives and equality between countries. María Emilia Mamberti, coordinator of our Initiative, sent a summary on the contribution of human rights standards to global taxation discussions, while Olivia Minatta, from CESR, another of our Initiative's organizations, sent a paper on constitutional trends in taxation in the region. From a total of 80 abstracts received, 21 authors from 10 countries were selected by a committee of national and international experts to present their ideas in an academic space that will be held this first week of May in Bogota. These ideas, which feed the debate on global taxation, have served as a kind of preparation for the Cartagena Summit, in which civil society is expected to play an active role.

During the first day of this academic conference, which took place on Tuesday, May 2, the discussions focused on the need to advance in the improvement of international taxation measures, as well as the shortcomings of the inclusive framework of the OECD. . These failures, both procedural and substantive, include Latin America and the Caribbean, which often reaches these instances without a unified voice and without adapting the rules of the global systems to the needs of the region.

Next, we share central ideas of the first date of the meeting:

Inequality has a lot to do with regressive tax systems

Jayati Ghosh, Commissioner of ICRICT and Professor of Economics at the University of Massachusetts Amherst, warned that the world is currently looking to Latin America and the Caribbean for the progressive transformations that are taking place here. However, the region is not escaping the global crisis due to the increase in food prices, the external debt of the countries most affected by the pandemic and the challenges posed by climate change, which has led to a serious setback in terms of inequality and the violence that derives from it.

Despite this scenario, Ghosh insists, with unfair and regressive tax systems it is impossible to face these problems. “In some places they pay zero taxes, while companies that generate a lot of profits grow, such as pharmaceuticals or oil companies, which benefit from the pandemic and the war in Ukraine. They double, triple, quintuple profits, while taxes are 3 or 5 percent, and that is due to the tax architecture of a century ago that is already obsolete”, notes the expert.

On this architecture, José Antonio Ocampo, former Minister of Finance of Colombia and today advisor of that portfolio for the Global Taxation Summit, in the attempts to develop global taxation mechanisms, the benefit for regions like ours has been minimal. “The issue here is international equity. The platforms sell in different countries, but in those they do not pay taxes, while in natural persons, many of the equity problems are due to the design of the taxation, which does not sufficiently control evasion and avoidance”, warns Ocampo.

Human rights and global taxation

Yariv Brauner, an expert from the University of Florida, mentions that, although the Sustainable Development Goals (SDGs) seem very general, from a legal point of view it is the only global agenda that exists, which is why it is necessary that the agenda tax is compatible. In this sense, and taking into account the unavoidable links between countries, it is clear that no nation can have its own tax regulation, but common rules are necessary. For this reason, says Brauner, we need a framework agreement, much more binding than a new tax model proposed by the PNU. “We have an opportunity to make constructive proposals if we focus on international tax structures,” he concludes.

Abdul Muheet Chowdhary, from the South Centre, says that countries may be losing between US$240 billion and US$250 billion because of tax havens, while Latin America could receive four times the current money if the United Nations solution were implemented. in taxation.

In a context of greater and better collection, with international rules, the guarantee of human rights, especially economic, social and cultural rights, would benefit, since it is clear that they require a high allocation of resources. By the way, Pedro Rossi, professor at the State University of Campinas (Brazil) and member of the Committee of Experts of our Initiative, human rights cannot be a by-product of the organization of an efficient economy, but must be a foundation fundamental. “It is said that taxes cause distortions in the market economy and that they generate inefficiencies. We have to give new meaning to these terms if we want to change people's living conditions, since there are ways of addressing efficiency that violate human rights”, notes the expert.

By the way, Rodrigo Uprimny, Dejusticia researcher and also a member of the Committee of Experts of our Initiative, the relationship that Rossi mentions becomes even deeper if we refer to the relationship that is woven between global taxation and our Principles and Guidelines for Human Rights in Tax Policy, since rights and their satisfaction cost, while tax justice has an impact on human rights. "What is seen globally is that the tax competition to the bottom has eroded the ability of states to collect enough taxes to satisfy the rights of the population," he asserts. More about this source textSource text required for additional translation information Send feedback Side panels