It’s time for the world’s leaders to note that tax is key to development

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David Cameron is hosting the meeting of the High Level Panel, of which he is a co-chair and which the United Nations set up to create a successor to the existing Millennium Development Goals, today. Unsurprisingly this has given rise to significant NGO activity since the MDGs set the aims for development for more than a decade and any successor might do the same.

What is pleasing is to note how times have changed when it comes to the role of finance, illicit finance and tax in this lobbying. The MDGs recognised these issues, but only peripherally. Now they are centre stage.

Christian Aid has a three part hope for the new plan, the second of which is that:

the new global action plan must also look beyond aid to other means of financing development. She pointed to the need to tackle tax dodging and financial secrecy, which have led to trillions of dollars being hidden in tax havens by tax dodgers, bribe-takers, money launderers and other criminals.

This robs public services such as schools, hospitals and police forces the world over of much-needed funding – and hits hardest against poor people who rely on public provision. Christian Aid estimates that every year, tax dodging deprives poor countries of $160 billion – more than they receive in aid.

I support that.

Save the Children is also lobbying hard. They have issued a new report entitled 'Born Equal: How reducing inequality could give our children a better future'. As they say (page 37):

Consideration of how to tackle capital flight and to strengthen domestic taxation measures will be key to increasing domestic revenues. It is now widely accepted that illicit financial outflows (dominated by corporate tax evasion) dwarf receipts of aid.

Progressive taxation plays a critical role in raising revenues to fund social protection mechanisms and universal access to basic services, and also in establishing the social contract between states and citizens upon which effective political representation and accountability depend. A major issue for the post-2015 framework is to what extent it should emphasise both domestic budgetary transparency and the international financial transparency between states that is necessary to combat illicit flows.

This is a big change for Save the Children: they've not, that I recall, been as forthright as this before, and I welcome it. These are key issues in the aid agenda now. I hope the world's leaders will take note.