COVID-19 pushed 148 million Asians into poverty while billionaires grew their wealth by $1.46 trillion
Pakistan Kissan Rabita Committee and Fight Inequality Alliance Pakistan held a protest demonstration in front of Lahore Press Clubon raising inequalities in Asia and specifically in Pakistan. Participants chanted slogans against raising prices of food items and inequalities.
Across Asia, the COVID-19 pandemic devastated lives and livelihoods, taking away 147 million jobs and pushing 148 million Asians into poverty but while most Asians are worse off, the region’s billionaires grew their wealth by $1.46 trillionleading to a staggering rise in inequality-- reveals a new Oxfam report today.
According to the report, Asia’s richest one percent now own more wealth than the poorest 90 percent and the impact of COVID-19 combining with existing inequality has set back equitable development in the region by decades. Existing economic policies are rigged in the favour of the wealthy, allowing them to accumulate incredible amounts of wealth, while narrowing the chances of the poorest to catch up.
Vulnerable groups such as women, ethnic and religious minorities and migrant workers were worst affected as their incomes shrunk and their access to essential services was reduced. School closures have worsened the education divide with an estimated 10.45 million children dropping out of school and university forever, with far-reaching consequences for their life-chances.
Riffat Maqsood (Tameer e Nou Women Workers Organization) said that in countries such as Indonesia, Pakistan and Philippines 46-64 per cent households were unable to receive medical attention due to lack of funds. Women make up over 70 percent of healthcare workers in Asia but over 60 percent struggled to receive adequate healthcare during the pandemic. Women also experienced an increase in their care-work responsibilities, suffered greater levels of domestic and gender-based violence, while rates of teenage pregnancies and unsafe abortions rose.
Shazia Nawaz of Awaz Foundation said that: Asia’s richest were shielded from the impact of the pandemic and many even thrived. The number of billionaires in the region grew from 803 in March 2020 to 1087 in November 2021 and billionaires were able to grow their wealth by 74 percent. Some wealthy Asians even profited directly from the pandemic and by March 2021 there were twenty new Asian billionaires whose fortunes came from equipment, pharmaceuticals, and services needed for the pandemic response.
Rana Mubasharof Aman PukarFoundation said that Oxfam’s report makes recommendations to address Asia’s growing inequality through progressive policy actions by governments that prevent millions of poor Asians from falling through the cracks. According to the report a wealth tax of 2 to 5% on Asia Pacific's multi-millionaires and billionaires could raise an additional $776.5 billion every year. That would be enough to increase public spending on health in the region by 60% and can prevent unnecessary and pre-mature deaths in the future or enhance education opportunities to bridge the gap opportunity.
Jalvat Ali of Labour Education Foundation said:“The pandemic has shown the need for better social protection and stronger public health systems. Governments across the region must scale up existing programmes and introduce policies designed to reduce health and economic inequalities. This means increased taxation of rich individuals and corporations, greater investment in public services and vaccines for all, social protection and decent work, living wages, and robust labour rights. It also means investing in and valuing care work to tackle gender inequality. The millions of workers in construction, retail, wholesale, transport, agriculture and informal sectors earn much lower than the required to pay income tax. Pakistan is a low-wage economy. Working class people are not earning enough to make ends meet. And even then they are paying the indirect taxes that are imposed on them.Saima Zia of the Pakistan KissanRabita Committee said that when it comes to women, only 22.39 percent of them are part of the labour force. Nearly 77 percent female population is not formally economically active. The domestic work done by women is not yet recognised as labour.
Nearly half of the population lives below or around the poverty level. How can they be asked to pay taxes when they find it difficult to feed themselves?Now comes the top five percent population of this country. This population owns most of the means of production and wealth. They own industries, big businesses, corporations, lands, expensive housing societies, glittering shopping malls, brands. They own most of the wealth created in this country. They are supposed to pay taxes. Their number might seem small compared to the total population but they are the ones who control, own and dominate the economy. And it is this elite that evades taxes.The problem is not really the number of people paying taxes. The real problem is that those who own wealth are not paying enough taxes to run this country without borrowing heavily. The real issue is the failure of the state and taxation system to bring the rich and powerful people into the tax net. We are at a turning point in history where we have an opportunity to rebuild a better economic and social system that does not allow a few to accumulate wealth at the expense of millions.
Press release by
Pakistan should stop this race to the bottom of corporate taxation. While the IMF mandated changes, that we are being forced to adhere is pushing increased tax burden on people, any move to set a global minimum will further hurt our sovereignty.
On this day of action for Tax Justice, we demand that Government of Pakistan leads the way to stop this relentless race to the bottom of corporate taxation in step with the dictates of the rich nations and some more powerful county. In the past few years, we have seen dramatic reduction in corporate taxes with a concurrent increase in indirect taxes, tolls and user fees which burden on poor.
Several other tax incentives, some in the name of ease-of-doing-business and some in the name of Pandemic have boosted the corporate profits, which is reflected in the soaring stock market indices. This is a time when the unemployment rates are touching the highest levels since independence, fuel prices have sky-rocketed – while global crude prices remain subdued – and health and education burden on the poor is breaking their backs.
In midst of such circumstances, the OECD, G-7 and G-20 are pushing for a minimum global tax of 15 per cent. In our country we have witnessed that any attempt at fixing minimum, ends up being the norm, the greatest example being workers’ wages. Most corporate think that minimum wages prescribed is what is to be paid, so will it be with the taxes. We categorically reject the idea of 15 percent tax on the corporate. The minimum must be pegged higher, as almost all countries have various incentives which are location or category based. Since markets are perfectly imperfect, the idea of competition reducing prices for the consumer is completely untenable. We are seeing that products which have very little intrinsic value are priced very high and corporate revenues are delinked from such considerations.
Therefore, we demand a restoration of tax to a minimum of 35 percent of the profits of all corporate entities (especially Banks, Cement Cartel) and ensure a complete disclosure of all tax havens and jurisdictions that allow for such manipulation. Taxes must be paid to those from who revenues are generated. We demand fair and Progressive tax structures across the globe and not the G-7/G-20/OECD “tax deal”. This calls for consideration of all the poor people of the world who are actually in economic or climate distress.
Tax the Rich Not to the Poor!
No to Tax deal of the Rich!
NOTE: The full statement of Pakistan Fisherfolk Forum is available here: Pakistan Fisherfolk Forum Statement PDF
This is to bring into your notice that the rich elite in Pakistan is receiving all sort of tax exemptions while the poorest sections are on the receiving end. Rich elite does not pay taxes and then uses the courts and the political influence to get the exemptions through presidential ordinances and general amnesties.
Most glaring example is the sugar factory owners. This year, The Federal Board of Revenue (FBR) demanded Rs 469 billion tax from 81 sugar mills, among them were the sugar factories of Industrial tycoon Jahangir Tareen with 7 billion Rupees tax demand. All that is now put in cold store as the matter is hushed up in media and government circles.
The Competition Commission of Pakistan’s (CCP) decision to impose Rs 44 billion fine on 81 sugar mills and the Pakistan Sugar Mills Association (PSMA) on charges of manipulation of market and looting consumers in 2019 has not been materialized.
Various sectors including fertilizer companies, government power companies, IPPs, K-Electric, general industry, gas companies owe Rs523.60 billion Gas Infrastructure Development Cess (GIDC). Following the Supreme Court of Pakistan decisions to collect GIDC from various sectors, the industrialists went from one corner to another to put pressure on the courts and got the government to waive over Rs 300b GIDC dues, thus the PTI government writes off half of liabilities of industrialists.
The amount waived in favor of the industrialists, mainly Karachi-based, was more than the total loans written off from 1971 to 2019 that stood at Rs 256 billion.
Similar to Pakistan, an international The “Deal of the Rich” agreed by G7 countries on 1st July 2021 will not benefit the developing countries. The proposals in the OECD-led Inclusive Framework’s statement for new global tax rules, do not address the fundamental problems of the current international tax architecture. It is designed to accommodate the recent deal of the G7 on a global minimum corporate tax rate of 15%, and disregards the suggestions, proposals and reservations that a number of developing countries have put forward throughout many years of work.
The Global Alliance for Tax Justice, and many in the global tax justice movement were critical regarding the leadership role of the OECD, which is a club of the rich to reform international tax rules. To give its leadership the veil of legitimacy it created an Inclusive Framework (IF) which has so far barely gone beyond rubberstamping the Group of Seven (G7) “deal of the rich”.
The COVID-19 pandemic and its impacts present a historical opportunity to reform global corporate taxation and transform our tax systems to make them more responsive to the needs of people and the planet. It is unconscionable that the solutions offered by the world’s elite countries only serve to reinforce inequalities in the global tax regime that have long excluded the voice and interests of developing countries and peoples in the Global South. The agreed global minimum tax rate of 15% is far lower than the world corporate income tax rate average of approximately 25% and closer to the 12.5% proposed by some low/no tax jurisdictions.
The case of Pakistan is even worst. Economic privileges accorded to Pakistan’s elite groups, including the corporate sector, feudal landlords, the political class and the country’s powerful military, add up to an estimated 2958 billion Rupees, or roughly 6 percent of the country’s economy, a new United Nations report has found.
The biggest beneficiary of the privileges which are normally in the form of tax breaks, cheap input prices, higher output prices or preferential access to capital, land and services was found to be the country’s corporate sector, which accrued an estimated 799 billion Rupees in privileges.
The 1% richest Pakistani own 9 percent of the country’s overall income, and the 1.1 percent feudal land-owning class, owns 22 percent of all arable farmland. One percent rich in Pakistan owns 53,448 billion Rupees while the poorest 1 percent held just 0.15 percent. Overall, the richest 20 percent of Pakistanis hold 49.6 percent of the national income, compared with the poorest 20 percent, who hold just 7 percent.
Instead of taxing the rich, the present government is always ready to exempt the capitalist and feudal class from paying the due amount. Pakistan announced forgiveness to tax evaders if they invest black money in Imran’s govt housing scheme.
The regime’s primary growth-stimulating policy since March 2020 has been to encourage investors to direct illicitly gained money into the construction sector. While some short-term employment is generated by such investment, construction workers generally get hired by subcontractors on a job-to-job basis, which effectively equates to zero long-term employment effects.
Internationally, a solution agreed in a politically biased and opaque process, outside the UN system and the related accountable country representation, cannot have the legitimacy to be a binding international agreement. A fair global deal is only possible in an open, fully inclusive and transparent intergovernmental process, in which the public and civil society can hold negotiators to account for proposals and decisions, and in which the draft agreements are open to public scrutiny. Such a process is only possible within the framework of a UN based intergovernmental negotiation in which countries can participate as equals.
We therefore reiterate our call for the establishment of a universal, intergovernmental UN tax commission and negotiating a UN Tax Convention to comprehensively address tax havens, tax abuse by multinational corporations and other illicit financial flows.
We call upon countries to overcome the blockage to bring reform of international tax rules into the UN and work together for a truly inclusive and transparent negotiation process.
Press Conference by
Farooq Tariq, Saima Zia, Nasir Iqbal, Riffet Maqsood, Nazli Javed and Professor Zaigum Abbas,
Pakistan Kissan Rabita Committee
NOTE: The full statement of Pakistan Kissan Rabita Committee in Urdu is available here: Pakistan Kissan Rabita Committee Statement in Urdu PDF
NOTE: The full statement of Pakistan Kissan Rabita Committee in English is available here: Pakistan Kissan Rabita Committee Statement in English PDF
The Asian Peoples Movement on Debt and Development (APMDD) condemns the unjust arrest of one of our leaders, Saeed Baloch, by paramilitary forces in Pakistan last January 16, and demands his immediate release.
International Day of Action for People’s Food Sovereignty and against Trans-national Corporations observed in Pakistan
Pakistan Kissan Rabita Committee, SAAPE Food Sovereignty Campaign focal organisation in Pakistan, organised a seminar on the topic of "land mafia, feudalism and food sovereignty."