GFDD and FUNGLODE Highlights Dominican Tax collection System Promoting Social Justice during United Nations Commission on Social Development

February 11, 2013

On Monday, February 11, GFDD and FUNGLODE, in partnership with Social Justice in Global Development, United Nations Research Institute for Social Development (UNSRID), Loretto Community and the Committee on Financing for Development collaborated on a Side Event within the framework of the 51st Session of the Commission for Social Development.

The overall theme of the discussion was “Policy space through domestic
resource mobilization – a key to empowerment for social development.” The three interactive presentations focused on “Bargaining for fiscal space: mobilizing domestic resources for social development” introduced by Sarah Cook, Director of UNSRID; “Best practices in the tax administration for sustained revenue increase for social development” presented by Asunción Sanz, Director of the GFDD office in Washington D.C., and “Productive employment and income equality as the foundation to social
and economic development” given by researcher Bhumika Muchhala. The opening and closing remarks were made by Gemma Adaba, the moderator from Social Justice in Global Development, and Michael Lennard, acting as the panel’s discussant, who is Secretary of UN Committee of Experts on International Cooperation in Tax Matters.

Speaking in front of a packed audience, Ms. Cook focused on questions of how to build social policies in mineral-rich countries and what are the
challenges to develop them. She argued that mineral wealth is a blessing rather than a curse, as it can certainly drive the economic growth of the country. “However”, the speaker remarked, “a mineral-led economy can face a lot of challenges too”. For example, in designing social policies, the challenges include such problems as how to measure the availability of resources in fiscal space and how to bargain/allocate available resources, or if social policies are generally affordable etc. One
of the ways to overcome the aforementioned challenges is diverse state policies for stability adopted to the given national context, with social policies anchored in the domestic sources of financing.

On behalf of Germania Montas, Deputy Director of the General Directorate of Internal Revenue of the Dominican Republic, (whose trip was canceled last minute due to inclement weather), Ms. Sanz spoke on best practices in the tax administration for sustained revenue increase
for social development, using the Dominican Republic as a case study. The focal point of the presentation was the question of taxes as an ultimate source of the state income and a discussion of the three pillars of sound revenue generation – an adequate tax system, sound fiscal rules and an efficient tax administration with fiscally responsible citizens. The panelist finished the presentation with examples of best practices in tax administration implemented by the office of Ms. Montas in
the DR – a nation which has successfully implemented a tax collection system that promotes social justice.

The last speaker, Bhumika Muchhala, discussed the problem of the employment-led national development strategy as the most critical component of inclusive growth on the Post-2015 agenda. She outlined the four key issues that the employment strategy needs to address, particularly tackling the geographic distribution of unproductive employment; creating more equal
distribution of employment opportunities; boosting productivity in the existing state of employment and directing equitable distribution of capital and labor in public spending. With her dynamic presentation, Ms. Muchhala, as a young professional and reseacher, made an invaluable input to the discussion panel.

In summation of the intense and invaluable meeting, discussant, Michael Lennard reflected on issues currently on the UN agenda; differing tax rules from country
to country; VAT problems in developing states; tax avoidance as a result of globalization and the role of NGOs in raising the awareness of citizens as taxpayers.

Calls were made by panelists and audience alike to have a follow up meeting to take the discussion to the next level.

The Session of the Commission for Social Development, which comes to a conclusion on 15 February 2013, has been focused on the theme of people’s empowerment as an
important foundation for social development through poverty eradication and decent work for all.


Best practices in the tax administration for sustained revenue increase for social development


by Germania Montás Yapur
Bargaining for Fiscal Space: Mobilizing Domestic Resources for Social Development
by Sarah Cook – Director, UNRISD

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