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News: Action aid calls for reduction of taxes

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ActionAid  is urging the government to reduce harmful tax incentives that drain funding from children’s education in their countries while noting that African Union countries could send more children to school if governments cut tax incentives to corporations 

The organisation is also calling on all leaders to remember the promises they made as part of the Sustainable Development Goals to deliver inclusive quality education for all by 2030.

The right group gave the indication on the sidelines of the Pan-African High-Level Education Conference, in Nairobi

 ActionAid ’s, Education Programme Manager, Julie Juma said many of the governments have been making progress towards the target of spending 20% of their national budgets on education, but disclosed that the percentage is rather small to get an efficient result “

“We believe much more could be done if governments looked beyond the share of the budget spent on education and increased the overall size of national budgets by increasing the domestic tax base”

According to her, some quick breakthroughs can be made to increase tax revenues by eliminating harmful tax incentives given to multinational corporations. It could enable some countries to double their education budget.

 ActionAid  is urging the government to ensure that the tax systems are fairer, more progressive and better able to raise the funds needed to keep the pledges they have made at the Global partnership for education financing conference, to ensure that all children, especially girls are able to fully enjoy their right to a good quality education.

Evidence collected by ActionAid shows that, for many countries, governments are giving away vast sums in harmful tax incentives and even just a portion of these sums, if allocated to education, could ensure all girls and boys have access to quality public education.

“If we are to mobilise the money that is urgently needed for education, countries must now focus on ways to expand their domestic tax base.”

 Globally 263 million children are out of school. Of these, 61 million children are of primary school age and 5 million more girls than boys are currently receiving no primary education.  Many schools, especially in the world’s poorest countries lack electricity, trained teachers, adequate teaching, learning materials, basic infrastructure and sanitary conditions to ensure a good quality education for all.  

ActionAid research finds that governments in Sub-Saharan Africa may be losing around US$38.6 billion a year or 2.4% of their GDP to their own regime of corporate tax incentives, equivalent to nearly half their current education spending.    

“Many of these tax exemptions, such as tax holidays, are given to very wealthy foreign companies to encourage investment. However, many business surveys have found tax incentives effectiveness highly doubtful.  Foreign companies are more attracted by other factors such as infrastructure and rule of law, which government needs to tax to create”

ActionAid will present the findings of the report Making tax work for girls’ education: How and why governments can reduce tax incentives to invest more in girls’ education at PACE on 26 April.  

“It will set out the link between education and tax justice and recommending sustainable ways for African governments to dramatically increase financing for education by tackling tax policies that are too favourable to multi-national companies. At the meeting, ActionAid will also launch publications making the case for linking tax justice and education finance in Malawi, Mozambique and Tanzania”

The UN warned in 2016 that, unless developing countries increase their domestic tax intake to better finance public education, it will take them another fifty years to meet their commitments under the Sustainable Development Goals that promised all girls and boys should be able to completely free quality primary and secondary education by 2030.

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