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Taxation And Sustainable Development Goals – IMPRI Impact And Policy Research Institute

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Taxation and Sustainable Development Goals

Session Report
Chaitanya Deshpande

A Four-Week Immersive Online Introductory Certificate Training Course and  An Online Spring School Program on Fundamentals of PUBLIC POLICY were conducted by IMPRI Impact and Policy Research Institute, New Delhi. An informative talk about ‘’Taxation and Sustainable Development Goals’ was delivered by Dr Munawer Khwaja, fiscal expert and former Advise Fiscal Economy Adviser, at the International Monetary Fund. The focus of the talk was how taxation and sustainable development Goals interact with each other and how taxation can help to achieve Sustainability Development Goals. 

Sustainable Development Goals are the continuation of the Millennium Development Goals (MDGs) which were developed in 2000. As the climate issue became more critical, the UN General Assembly with other countries stated the Sustainable Development Goals for the period of 2015-2030. The goals are not only limited to the climate change phenomena but also target other issues such as poverty and inequality. All the goals are not amenable to the tax interventions but many of them are.

Taxation and SDGs

Tax for SDG Initiative by the United Nations brings taxation to the centre for SDG agenda. It talks about taxation for resource mobilization to implement SDGs. It focuses on how tax policies can be designed in a way to shape consumer and producer behaviour in a way that is suitable for SDGs. Just Taxation for SDGs can increase the trust in the government as taxation is a social contract.

SDGs only specify what goals to achieve. Thus, it needs to be figured out how these goals shall be achieved. Tax for SDG Initiative will address to the stakeholders how the goals shall be achieved, and what shall be the standardised practices to evaluate the progress of these goals in a particular country. Therefore, taxation interventions can smooth out the process for the implementation of SDGs. 

Some Possible Interventions that can be relevant to the achievement of SDGs

SDG number 17 talks about taxation for domestic resource mobilization to implement SDGs. This can help to administer, and monitor the progress on SDGs and also regulate and plan the expenditures accordingly. Another example is  SDG 1 removing poverty and SDG 10 reducing inequality. Well-designed taxation policies can substantially reduce inequalities. It will help to monitor poverty and inequality. It will also help to strengthen the social security base. 

Goal 3 regarding Good Health can also benefit from sound taxation policies in the form of Health Tax, health insurance policies. Also, there can be designated taxes to contribute to contribute to public health expenditures. Similarly, other goals such as Education (SDG 4), Gender Equality (SDG 5), and Renewable Energy (SDG7) can be better implemented with the help of fair and just taxation policies. 

Challenges

Though there is a huge scope to bring taxation into the picture for the implementation of SDGs, there is a diverse set of challenges. First and foremost, the financial condition of Developing, Underdeveloped and Least Developed Countries vary. Also, the capacities to enforce a particular tax vary. Hence, it is difficult to impose a universal, standard tax for the implementation of SDGs. The counterargument says that it is LDCs which will benefit more from these tax efforts for SDGs.  

Prof. Mukul Usher, at the end, provided his insightful comments about public finance and Sustainable Development Goals. Fiza Mahajan presented a formal vote of thanks and the day was called.

Acknowledgement: Chaitanya is a research intern at IMPRI.

Teaser Youtube Video of Fundamentals in Public Policy Programme: https://youtube.com/shorts/mf-BjX1_C0c?si=sxDNu1yXzpmexPyc.

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