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Tax Justice and Sustainable Development in the Arab Region: Lessons from tax systems in four countries

The Challenge

Tax and fiscal policies are essential tools to achieving social justice and to promoting sustainable development all over the world. In the Middle East there are region-specific factors that complicate campaigns to achieve the tax justice that is a precondition for social justice. These include inadequate fiscal spending on public services; inequitable distribution of tax burdens; and insufficient transparency, accountability, and public oversight of tax and fiscal policy. How can these challenges be overcome so that tax justice may be implemented in a meaningful and effective way? What measures must be taken regarding tax and fiscal policy so that social justice
is not only a dream but a reality?

What’s in the Report

Homing in specifically on Egypt, Lebanon, Jordan and Palestine, this report examines and compares the most prominent features of the tax systems in these countries and how they have thus far failed to support ‘Life, freedom, social justice,” the imperative articulated in the popular history-altering uprisings that shook the region starting in late 2010. Written by Dr. Nasser Abdel Karim, an advisor to UNDP and the World Bank, and supported in part by the Ford Foundation, the report asserts that tax and fiscal policies are key to addressing inequality and the corresponding prevalence of social injustice. It describes the extent of poverty in the region, supporting that depiction with hard data, and examines the multidimensional nature of inequality there, pointing out in particular the negative impact inequality has on women in these countries; they have less access to health care, education, and employment opportunities than men.

The report additionally considers how the existence of an informal economy contributes to the persistence of tax injustice. It discusses the kinds of reforms systems would need in order to improve the level of tax, economic and social justice extant in this quartet, while considering their unique context. It lays out specific economic challenges these four countries face, like the contraction of the manufacturing and agriculture sectors; the prevalence of indirect, regressive taxes; the relatively light tax burden imposed on wealth; tax evasion and low corporate taxation, and offers policy recommendations that address these considerable hurdles to achieving tax justice and, in turn, social justice.