Attend the Special Meeting of the UN Economic and Social Council, PRAKARSA Calls for Wealth Tax to be Included in the Tax Convention

The Executive Director PRAKARSA, Ah Maftuchan when delivering a speech at a special meeting of the United Nations Economic and Social Council (ECOSOC) on "International Cooperation in Tax Matters" at the United Nations (UN) Headquarters in New York (18/03/2024). Photo: The PRAKARSA

New York, The PRAKARSA - The Executive Director PRAKARSA, Ah Maftuchan, delivered a speech at a special meeting United Nations Economic and Social Council (ECOSOC) about “International Cooperation in Tax Matters” at Headquarters United Nations (UN) in New York. The invitation came from ECOSOC President, Paula Narváez Ojeda. The second session had the theme "The Role of Net Wealth tax in Promoting Equality And Financing The SDGs," which was held on Monday afternoon (18/03/2024), local time.

PRAKARSA being the only speaker from civil society organizations and from developing countries. Maftuchan was present along with other panelists including Lorenzo Uribe Bardon, Special Advisor to the Minister of Finance and Public Credit of Colombia, Shafik Hebous, Deputy Head of the IMF Fiscal Affairs Department, and Belema Obuoforibo, Director of the Knowledge Center and Member of the Executive Board of the International Bureau of Fiscal Documentation (IBFD), emphasizes the importance of implementing wealth taxes throughout the world.

At the meeting attended by UN member states, Maftuchan outlined the urgent need for a global wealth tax to address inequality and finance the Sustainable Development Goals (SDGs). He also highlighted the urgent need to address the concentration of wealth and its detrimental socio-economic impacts on society. He emphasized the role of wealth taxes in promoting a fair and inclusive economy by reducing inequality and encouraging fair access to resources. Additionally, Maftuchan underscored the importance of utilizing wealth taxes to finance development initiatives. "Especially in the face of an increasing fiscal deficit," he explained.

Furthermore, in his presentation, Maftuchan urged a progressive tax structure with varying rates based on net worth groups to ensure a fair contribution of the richest individuals to public services and sustainable development goals. In addition, he also called for international cooperation in implementing a wealth tax to overcome resistance and reduce concerns regarding tax avoidance and evasion.

Copying that, Maftuchan explained how opponents of wealth taxes often use arguments regarding the potential for capital flight, disincentives to investment behavior, and increased tax avoidance. “However, this problem occurs more often in tax haven countries than in countries that implement wealth taxes. "Therefore, I call for wealth taxes to be included in the UN Tax Convention to address these challenges," stressed Maftuchan.

Maftuchan reminded forum participants of the global consensus regarding the imposition of taxes on the income and wealth of the richest people, as recognized in the Addis Ababa Action Agenda. On this occasion Maftuchan urged the UN, including ECOSOC, to support countries in building fairer and more progressive tax systems to reduce inequality through wealth taxes.

In the end, Maftuchan proposed that ECOSOC facilitate a learning center among member countries to share experiences in designing wealth taxes more effectively. This includes a broader tax base, measures to reduce assessment costs and liquidity risks, as well as provisions to extend tax deadlines. In addition, advocating for tax transparency standards based on the UN Framework Convention on International Tax Cooperation (FCITC) is critical in improving countries' ability to collect taxes on capital income and assets.

"Collaboration between civil society organizations, global institutions such as the UN, and stakeholders is urgently needed in advocating for a global wealth tax, ensuring the participation of all stakeholders, especially developing countries, to shape global wealth tax policies," concluded Maftuchan.

Read the full speech here:

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