Speaking to a meeting of finance ministers, Fernando Haddad said that tax evasion could be resolved through international co-operation so that “these few individuals make their contribution to our societies and to the planet’s sustainable development.” He informed Brazil is pushing for a declaration on international taxation by G-20 members by July this year. India was the president of G-20 last year and Prime Minister Narendra Modi made a big show of his presidential tenure to impress the Indians on the eve of the general elections scheduled for April/May 2024.

However, on the issues of global tax on super rich, India did not make any move though, proposals were discussed for averting tax evasion by the high profile multinational companies including the giant tech companies of the USA. Brazilian President Lula has been taking a number of major initiatives in the interests of the developing nations and the underprivileged and the global tax on super rich is one of them. Brazil is determined to pursue this proposal at the coming G-20 meetings later this year.

The issue is a crucial one for the rich members of the G-20 and it will not be a smooth affair for Brazil to push that. Mr. Haddad in fact admitted that there would be a lot of debate about the proposal since not every member feels the same way about the problem that was brought to the Sao Paulo meeting by Brazil. Brazilian finance minister underlined that Brazil would play its role as the G-20 president to focus the issues which were not earlier discussed by the G-20 members.

According to a 2023 study by advocacy group Tax Justice Network, countries around the world could lose up to $4.8 trillion (£3.8 trillion) in tax revenue over the next decade due to tax havens. These havens are patronized by the global companies as also the rich many of them belonging to India. A report earlier this year by the EU Tax Observatory found that billionaires worldwide have effective tax rates equivalent of between 0 per cent and 0.5 per cent of their wealth. What is shocking is that during pandemic years, while the poor and others suffered and died, the profits of the big companies as also the worth of the rich individuals went up. In fact inequality widened more in pandemic years.

For India, the imposition of a special tax on super rich is overdue as all the recent report including the latest OXFAM report released in January this year show that inequality has been steadily going. In pandemic and post pandemic years, the poor people without assure social security are having pathetic living conditions whereas the incomes of upper middle class and rich have been on the rise. The widening of inequality has special impact in India because the common citizens are not protected through social security measures like many other countries of West and Latin America and other developing nations.

According to OXFAM report, India is facing rising industrial concentration in just five hands, and is enriching billionaires, private equity funds, and crony capitalists driving unprecedented level of inequalities and poverty among people. Dalits are facing high and unaffordable out-of-pocket fees in the private healthcare sector, financial exclusion in the private healthcare sector, and overt discrimination in both.

Globally, since 2020, the richest five men have doubled their fortunes, but during the same period almost five billion people globally have become poorer. Hardship and hunger are daily reality, and at the current rate, it will take 230 years to end poverty, but we could have the world’s first trillion are in just 10 years.

“A new era of monopoly: The supercharging of Corporate Power”, Oxfam report says that we are living through an era of monopoly power that enables corporations to control markets, set the terms of exchange, and profit without fear of losing business. Far from being an abstract phenomenon, this impacts us in many ways: influencing the wages we are paid, the foods we eat and can afford, and the medicines we can access. Far from being accidental, this power has been handed to monopolies by our governments.

In sector after sector, the report says, increased market concentration can be seen everywhere. Globally, over two decades, 60pharmaceutical companies merged into just 10 giant, global ‘Big Pharma’ firms between 1995 and 2015. Two international companies now own more than 40% of the global seed market. ‘Big Tech’ firms dominate markets: three-quarters of global online advertising spending pays Meta, Alphabet and Amazon; and more than 90% of global online search is done via Google. Agriculture has seen consolidation within Africa. India faces ’rising industrial concentration’, especially by the top five firms.

As the report points out, Corporate power fuels inequality in four ways: Rewarding the wealthy, not the workers; Dodging taxes; Privatising public services; and Driving climate breakdown. Corporations drive inequality by forcing wages down and direct profits to the ultra-wealthy. Oxfam analysis finds that 791 million workers have seen their wages fail globally to keep up with inflation and as a result each worker lost wages of nearly a month (25 days) in the last two years. Further, corporations have used their influence to oppose labour laws and policies that could benefit workers, such as minimum wage increases. They supported reforms that undermine workers’ rights, and also political restrictions on unionization.

Corporations and their wealthy owners also undertake sustained and highly effective war on taxation, resulting in cut in taxes. Aggressive tax planning, abuse of tax havens, and incentives also result in tax rates that are much lower, often closer to zero. It has deprived governments around the world, but especially in the Global South, of trillions of US dollars in revenue that could be used to reduce inequality and end poverty.

Privatising public services has affected the people. Basic services are being treated as asset classes and public money is used to guarantee corporate returns rather than human rights. Private equity firms are snapping up everything from water systems to healthcare providers and nursing homes, amid a litany of concerns about poor and even tragic outcomes.

Privatization can drive and reinforce inequalities in vital public services, entrenching gaps between rich and poor, excluding and impoverishing those who cannot pay while those who can pay are able to access good healthcare and education. Privatization can also drive inequalities on the basis of gender, race, and caste. For example, Oxfam found that Dalits in India face high and unaffordable out-of-pocket fees in the private healthcare sector; financial exclusion in the private education sector; and overt discrimination in both.

In India, where the private healthcare sector is now worth US$236 billion and rising rapidly, the World Bank’s private sector arm, the International Finance Corporation (IFC), has directly invested over half a billion dollars in some of the country’s largest corporate hospital chains owned by some of its richest billionaires. Yet in June 2023, Oxfam found that the IFC has not published a single evaluation of its health projects in India since these started over 25 years ago. Indian health regulators have upheld multiple complaints, including cases of hospitals overcharging, rigging prices and refusing to treat patients living in poverty for free, despite this being a condition of receiving government land for free. Furthermore, of the 144 hospitals funded, only one is located in a rural area.

For years, Oxfam has raised alarm about widening and extreme inequality. As India entered 2024, the very real danger is that these extraordinary extremes are becoming the new normal. Corporate and monopoly power is an unrelenting inequality-generating machine, the report says, adding that we are living through what appears to be the start of a decade of division: in just three years, we have experienced a global pandemic, war, a cost-of-living crisis and climate breakdown. Each crisis has widened the gulf – not so much between the rich and people living in poverty, but between an oligarchic few and the vast majority.

Brazil has taken the findings of the Oxfam report seriously, the same is with South Africa which has extended support to the views expressed by the Brazilian finance minister. India is facing general elections in April/May this year. Te new government is expected to be formed after May and the final budget is expected to be placed to new Parliament in July this year. The same month Brazil is expected to be ready with its declaration on global tax. Irrespective of which combination forms the next government, Indian government has to give serious consideration to the imposition of a special tax on super rich on the lines of the proposed declaration. Enough resources can be mobilized through this process. That is necessary to generate lakhs of jobs in the economy which witnessed jobless growth strategy for the last ten years. (IPA Service)