It is urgent to apply tax reforms to close social gaps

For millions of people in Latin America and the Caribbean, the COVID-19 pandemic meant living in conditions of poverty, while for a small group of billionaires, it has been an extreme gain. According to the Latin American Network for Economic and Social Justice (Latindadd), it is urgent to apply tax reforms to close the social gaps.

“Today we have the opportunity to reform tax systems to make them more progressive. It is an urgent need for which we continue working, to change or reform them. In a world where the rich are much richer, fixing a minimum contribution from their fortunes could be a solution. This would help to redistribute wealth, to promote deep social policies in the region and in the world”, explained Luis Moreno, coordinator of the Tax Justice area of ​​Latindadd.

As an Oxfam report has found, between March 2020 and November 2022, the wealth of billionaires in Latin America and the Caribbean increased by 21%. This growth is five times faster than that of the region’s GDP, which increased at a rate of 3.9%.

And the fact is that the data leaves no room for doubt: in El Salvador, the richest 1% of the country has taken four times more of the new wealth than the poorest 50%while in Honduras and Guatemala, the 1% with the most money took seven times more than the poorest half of their population.

In Brazil, the richest 1% concentrate half of the nation’s wealth. In the case of Mexico, the wealthiest man in this country has a fortune greater than that of half the poorest population as a whole, and we are talking about a territory that has 130 million inhabitants.

“In the context of the pandemic and the economic and social crisis generated by it, added to the negative economic effects generated by the conflict between Russia and Ukraine, we see that they are affecting everyone globally. It has also had an impact on the growth of inequalities in the world and especially in Latin America and the Caribbean, making the poor poorer and the rich richer. We are facing an unfavorable scenario for the majority,” Moreno explained.

Finally, andThe specialist stressed that progressive tax reforms are needed to help close the gaps that have been worsening in this context and that a fair, equitable and redistributive tax regime is needed to provide governments with capacities so that they can benefit citizens with public policies and quality state services for all.