Thu, Jul 16, 2015
Policy research group Global Financial Integrity (GFI) estimates almost $1 trillion leaves poor nations each year due to illicit finance flows from tax evasion, crime and corruption.
ADDIS ABABA (Reuters) - More than 100 countries have agreed on a framework to bankroll an array of ambitious development goals, ranging from tackling poverty to dealing with climate change by 2030.
They failed, however, to grant more powers to a global tax body to help developing states claw more revenues from big companies.
The deal announced on Thursday in Ethiopia's capital laid out ways for developing countries to implement the 17 so-called Sustainable Development Goals (SDGs) by mobilizing domestic resources such as taxes, leverage private investment and channel foreign assistance.
The SDGs - set to be endorsed by the United Nations General Assembly in September - will replace the eight Millennium Development Goals that had helped focus attention on the needs of poor nations for the past 15 years.
Meeting the 2030 goals would cost between $3.3 trillion and $4.5 trillion a year in state spending, investment and aid, analysts say, an amount roughly equivalent to the United States 2016 federal budget of $3.8 trillion.
Current spending on infrastructure, education and health left a funding gap of about $2.5 trillion, much of which would have to come from private business, according to the U.N. Conference on Trade and Development (UNCTAD).
"This agreement is a critical step forward in building a sustainable future for all," U.N. Secretary-General Ban Ki-moon said after three days of talks in Addis Ababa. "It provides a global framework for financing sustainable development.”
There were no additional aid pledges at the conference,although the world's richest nations again committed to a target of 0.7 percent of gross national income. However, few meet that level in practice.
Centrepiece in discussions was the bid to help countries tap more of their domestic resources, involving measures to widen a nation's revenue base, improve tax collection, tackle tax evasion and avoidance and clamp down on illicit financial flows.
Policy research group Global Financial Integrity(GFI) estimates almost $1 trillion leaves poor nations each year due to illicit finance flows from tax evasion, crime and corruption.
The summit failed to endorse a push by the G77 coalition of developing states to hand more powers to a U.N. tax committee that would create a body able to put more pressure on multinational firms to pay more tax in developing states.
"The decision is an appalling failure and a great blow to the fight against poverty and injustice. Developing countries, which are losing billions of dollars a year to tax dodging, are not being given an equal say in fixing unjust global tax rules," said Martin Hojsik, a tax campaigner for ActionAid.
Richer nations said developing states needed to improve their capacity to raise revenues and collect taxes.
U.S. Treasury Secretary Jacob Lew told reporters that developing states were being included in efforts to establish "a better set of rules...ranging from making sure that legal avoidance of taxes is more difficult and illegal avoidance of taxes is clamped down."
(Image Credit: un.org)
Are you impressed, have any concerns, or think we can improve this article? Comment below or email us.