We publish here the intervention of Nelsy Lizarazo, General Coordinator of the Latin American Campaign for the Right to Education, in the meeting ‘Education Ministerial Santiago 2024: from commitment to action’, a meeting in which more than 20 Ministers of Education from Latin America and the Caribbean together with several Ministers of Finance exchanged views and experiences on the reactivation, recovery and transformation of education:
1. Starting points
When we speak of education, we speak of the Human Right to education and, therefore, of a right that belongs to everyone, throughout life, without exception, without exclusion. The guarantors of human rights are the States. The other actors are co-responsible, but not guarantors. To guarantee the human right to education, strengthening public education systems, from early childhood to youth and adult education, is, at least in our region and from CLADE’s perspective, the way forward. Public education needs to be transformed and this transforming horizon is that of social justice, critical thinking, creativity, planetary awareness, non-violent coexistence, non-discrimination… and much more. Public financing of education is the most efficient and socially responsible investment that countries can make. Every dollar invested in education produces a greater return for individuals, and even more for society, than any other investment.
2. The question
What is the relationship between opening an account or company in a false name in the Isle of Man (a tax haven) and the lack of drinking water in a school in any Latin American and Caribbean country? What links tax evasion by mega-corporations and the global rich to the financing of quality public education?
The Latin American Campaign for the Right to Education (CLADE), the Latindadd Economic and Social Justice Network and the Latin American and Caribbean Tax Justice Network (RJFLAC) have joined forces and agendas to answer these questions and finally reveal the close link between tax justice and education financing.
3. Lights and shadows in the current scenario
From the place of education – Shadows
The most recent reports, both at global and regional level, alert us to the insufficient achievements and stagnation in the 2030 agenda. I will not dwell on this diagnosis because those of us who are here are sufficiently familiar with it and, moreover, we know precisely the situation in each of our countries.
I will recall, however, that the pandemic expelled 160 million students from educational centres in the region and, once again, we are not sure if this figure includes young people and adults and that, paradoxically, the public budget for education has decreased substantially and that the precariousness of public education systems, with a few exceptions, is increasing.
The UN SDG Report, presented on the occasion of the 2023 Summit, stressed that in order to meet Goal 4, which, I insist, places lifelong learning, the financing of education must become a priority for national investments. In addition, measures such as making education free and compulsory, increasing the number and training of teachers, improving basic school infrastructures and adopting digital transformation, the latter of which we will also be discussing over the next few days, are essential.
At the global and regional level, the call to ensure the achievement of the 2030 Agenda is urgent. SDG 4 is a commitment by all LAC states to ensure inclusive, equitable and quality education and promote lifelong learning opportunities for all.
The TES emphasised priority lines of action linked to SDG4. One of these lines of action is public and sufficient financing for education, and one of the mechanisms included is precisely tax justice.
Our States are committed to the Marrakech Framework for Action for the education of young people and adults. They are also committed to the Tashkent Summit on early childhood education. In both cases, increasing public budget shares is a substantial part of the commitment.
From Tax Justice – Shadows
-LAC’s tax systems are highly regressive: 70% of tax revenue comes from indirect taxes. . Proportionally, those who have less pay more taxes than those who have more. In the case of Guatemala, 51.3% of tax revenue is accounted for by consumption taxes. In the case of Argentina, 46.8% of tax collection is explained by indirect taxes, consumption taxes. As in the case of Guatemala, those who have the least pay the most, in proportion.
- – Latin America and the Caribbean lose much-needed resources every year. The annual regional losses estimated by different organisations and CSOs show that, as a result of tax avoidance, we stop collecting 500 billion dollars per year, according to a report by the global Tax Justice Network in conjunction with ISP and the Global Alliance for Tax Justice.
- -We also lose $320 billion a year to tax evasion, according to ECLAC. In addition, 5% of regional GDP is lost through tax incentives, and by not taxing large fortunes we currently lose 26 billion USD per year according to a report by Latindadd, RJFLAC and Fundación SES. Tax collection is 12 points less than GDP, compared to OECD countries.
At the national level, some countries in the region have made or are making progress in progressive tax reforms. This is the case of Brazil, whose law on taxing the super-rich and offshore companies is awaiting presidential approval and will raise $20 billion by 2024. Colombia has taken important steps in its latest tax reform, while Honduras is in the process of approving its tax reform. It is not happening in all countries, but it is certainly starting to become a matter of public debate.
Sixteen LAC countries decided last July in Cartagena de Indias to create the Regional Tax Cooperation Platform for Latin America and the Caribbean, a regional coordination space with the technical secretariat of CIESPAL and the pro-tempore presidency of Colombia.
In November 2023, 125 countries voted at the UN Assembly in favour of starting negotiations for a United Nations Framework Convention on International Tax Cooperation and working towards inclusive and effective international tax cooperation.
And recently, in DAVOS, 250 rich and very rich people have made a plea for them to be made to pay more tax. In that statement they assert that “This will not fundamentally alter our standard of living, deprive our children, or harm the economic growth of our nations. But it will turn extreme and unproductive private wealth into an investment in our common democratic future”.
There is a trend, not yet strong and consensual enough, but it is a trend and there we have an opportunity, as a region.
4. The concrete links
The national reports of the process we have carried out indicate that in Argentina, the loss due to tax evasion amounts to USD 2,684 million. If progressive measures are applied, spending on education could be doubled.
Colombia: USD 17,365 million (5.4% of GDP) – equivalent to 100% of the education budget.
Guatemala: evasion of USD 149 M. With these resources, 100% of students in basic education would be covered, 50% in diversified education.
Paraguay: loss is USD 100 M – equivalent to 100% of education expenditure.
Peru: evasion and avoidance of USD 80,000 M – equivalent to 4 times the annual investment needed in education.
Dominican Republic: evasion and avoidance 4.5% of GDP. Average spending on education is 3.97% of GDP.
Our initial question is, What is the relationship between opening an account or company with false names in the Isle of Man (a tax haven) and the lack of drinking water in a school in any country in Latin America and the Caribbean? What links tax evasion by mega-corporations and the global rich with the financing of public and quality education, finds its answer in these data?
The possibility of increasing investment in education by eliminating the practices of evasion, avoidance and illicit financial flows in our region is a way forward now. These resources, invested with a focus on rights and in an efficient manner, would make it possible to accelerate the achievements we want, in the horizon we seek.
5. The proposals
From CLADE, Latindadd, and RJFLAC we seek new spaces from which to extract financing for quality education in the region. These are the property tax, the tax on great wealth and the increase of taxation on corporate abuses.
What do we propose?
To join and actively participate in the Regional Tax Platform, to realise regional and global tax cooperation.
Push forward the UN Tax Convention process.
Intersectoral dialogue – Open permanent space for dialogue between MinEd and Min Fin – flow of information, knowledge, exchange, locating the role of tax justice for the recovery of resources for the financing of public policies that guarantee the rights of all.
Inter-ministerial Roundtable on Education Financing, led by the ministries of education and finance, with the participation of related ministries (labour, women, protection, among others).
Open and sustain spaces for dialogue with students, teachers, organisations and collectives, to identify needs, define priorities, monitor educational investment, and proposing alternatives.
Improve the quality and allocation of public investment in public education systems, promoting the efficient management of the sector’s resources.
We urgently need to close gaps and inequalities. We urgently need to open up opportunities for our children and youth to build projects for a full life. Our adults must have ample and sufficient possibilities to strengthen their contribution to social cohesion, to the elimination of gender-based violence, and to non-violent societies. Our indigenous women and girls must have access to culturally relevant public education. It is urgent that the right to education is guaranteed and for this, we know, more resources are needed and, undoubtedly, they need to be better managed.
We need to accelerate the pace; the future is being built today. We want societies based on rights and not on fear. We can no longer postpone our history. We want a second chance on earth. On that road, count on us