The urgency of progressive tax reforms to end inequality in Latin America

On March 15, our Executive Director Magdalena Sepúlveda participated at a Conference in Paris.

The meeting, held at La Maison de l'Amérique Latine in Paris, served to highlight the discussion of how States can implement bold tax reforms aimed at increasing their financial resources and to analyse how countries such as Colombia and Chile have decided to implement progressive tax reforms to ensure that companies and the wealthiest pay their fair share of taxes. The talk also focused on promoting better coordination among the region's capitals, so that they stop competing by reducing taxes on multinationals, as a way of better defending their interests in negotiations at a time when the international tax system is being reformed.

Among the speakers were Alain Rouquié, director of Maison d’Amérique Latin; Ricardo Martner, economist, former head of the finance department of ECLAC and member of ICRICT; Edmund Fitzgerald, professor emeritus of Antony College, Oxford and member of ICRICT; Luis Fernando Medina Sierra, permanent representative of Colombia to the OECD; and Magdalena Sepúlveda, a human rights lawyer, our Executive Director and member of ICRICT.

In this regard, Magdalena Sepúlveda said that "at a time of economic, social and political crisis caused by COVID-19, the populations can no longer take it anymore. It is time for those who have the most, the multinationals and the super-rich, to pay their fair share of taxes in order to reduce the gaps".

Context

Latin America leads the rankings in inequality. The region faces great challenges after the Covid-19 pandemic and the effects of the war in Ukraine were also felt in the territory. 

Currently, one-third of the Latin American population is below the poverty line (the equivalent of 201 million people, 15 million more than before the start of the pandemic), and 13% is in extreme poverty -children, women, indigenous people and people of African descent are the main victims. ECLAC estimates that this is a setback of a quarter of a century. Most countries in the region are facing the return of galloping inflation, but also growing indebtedness and a context of highly volatile investment and fiscal revenues, despite a new cycle of rising commodity prices.

Wealth has continued to concentrate at the top of the pyramid. Since the start of the pandemic, the wealth of billionaires has increased by 21%, a growth rate five times that of regional GDP, according to Oxfam. One hundred billionaires now own more wealth than 392 million people or 60% of the region's population.