Taxation and fiscal policies play a key role in development financing

Statement delivered by Haoliang Xu on behalf of UNDP: ‘Dialogue on tax and Sustainable Development Goals (SDGs)— Towards a Shared Understanding across the Ministries of Foreign Affairs, Finance and Tax Administrations’, a joint initiative between the Government of Norway, Columbia University and UNDP

November 30, 2022



Distinguished Members and Representatives of Governments,

Academia, the Media and Civil Society

Colleagues and Friends, and Prof Joseph Stiglitz

Good morning. It is my great pleasure to welcome you all to this remarkable global dialogue on tax and the Sustainable Development Goals.

The dialogue aims to develop and reinforce a shared understanding of various interlinkages between tax and the Sustainable Development Goals and how cooperative approaches can bring better results for all stakeholders.

The Sustainable Development Goals are a universal call to action to end poverty, protect the planet, and ensure that people around the world enjoy peace and prosperity by 2030.

However, achieving these goals is highly challenging and requires significant, well-targeted public and private investment.

Taxation and fiscal policies play a key role in development financing.

Taxes provide the necessary funding, promoting new and more sustainable growth strategies, and they are the most stable and reliable source of state revenue. As we have seen in many countries, however the full tax potential is yet to be tapped. All too long different countries have rather backed on official development assistance and taking on loans – a strategy that for various reasons has proven to be rather unreliable and risky, thus needs to be rethought.

Next to being a revenue source, well-targeted tax and fiscal policy can encourage behavioural changes that could help achieve desired environmental, health, and gender equality outcomes, to name a few, which are important aspects of the Sustainable Development Goals, which will be discussed during the three days of the dialogue.

Taxes can for instance promote healthier living, better education, more sustainable energy production and consumption, cleaner oceans, retaining biodiversity and more equality.

There is no doubt, we need to make advances on tax and the SDGs without further delay to have the developmental impact at the scale and speed that is needed. Domestic revenue mobilization is becoming increasingly important. Moreover, the strategic use of the dual function of taxation can bring us closer to foster good governance, establish a deeper social contract, and achieve sustainable development goals across various sectors.

With taxation we can leverage existing efforts to promote sustainable development. Therefore, we need to work towards closing loopholes in taxation, simplify tax rules, strengthen the capacities of fiscal policy units and tax administrations, increase domestic revenue mobilisation in a fair, efficient, and equitable manner, while also advocating for a fair share of international tax revenues for developing countries.

Ensuring that all agencies directly involved with taxation are continuously engaged and the approaches between ministries of finance and resource ministries are coherent can be a major opportunity in implementing robust taxation regimes.

Distinguished Guests, Colleagues and Friends

As most of you will be aware, more opportunities have opened with last week’s unanimous adoption of a resolution to “begin intergovernmental discussions in New York at United Nations Headquarters on ways to strengthen the inclusiveness and effectiveness of international tax cooperation” by the United Nation’s General Assembly’s Second Committee. New and reformed global tax rules and a global tax body can give developing countries a greater say than the current model offers.

While the focus of the dialogue is on discussing the various linkages of tax and the SDGs; exchanging evidence, lessons learned and perspectives by different stakeholders; the dialogue also has the potential to provide input to the UN process which follows this important resolution.

I encourage all of you to think innovatively and across all perceived boundaries to come up with bold, new solutions how taxation can support countries to achieve their developing goals. Open discussions during the plenaries and at the side-lines of the dialogue are what I am looking forward to. Also, I strongly hope that you can establish new contacts throughout these three days which can further foster South-South and Triangular exchanges and cooperation.

Distinguished Guests, Colleagues and Friends

I trust your commitment to travel to New York to participate in the dialogue will also show in your active participation in the dialogue; interacting and sharing your perspectives, viewpoints, and ideas how to address current challenges and advance achievement of the SDGs with and through taxation and envisioning reformed global tax rules which give a stronger and more inclusive and effective representation of developing countries. I hope you find these debates most useful and inspiring.

Let me thank Columbia University particularly the Initiative for Policy Dialogue, the Government of Norway, and my UNDP team for all the work done and now let me introduce you to the video message conveyed by the Administrator of the United Nations Development Programme, Mr. Achim Steiner, who wished to be present at this event but has to join the United Nations Secretary-General’s delegation in Addis Ababa.