Taxation, fiscal space and resource mobilization


Responding to the social protection needs of the population requires a sufficient level of resources. Most of these resources have to be raised at the national level, ensuring sustainability, equity and solidarity in financing, and good governance. National tax systems are one important source of financing, particularly with regard to a sufficiently broad and progressive revenue base, taking into account different types of taxes. Other possible options to expand fiscal space for social protection include the reprioritization of public expenditure, earmarking revenues from natural resources, as well as international cooperation and support in the case of countries with insufficient economic and fiscal capacities.

While different strategies can be sought to raise the necessary resources for social protection, such as the re-prioritization expenditures, increases in the tax base, improvements in the collection of revenues etc., the creation of the necessary fiscal space in the government budget to finance  social protection benefits ultimately depends on the political will do commit the necessary resources. For tax-financed provisions, the tax base has to be sufficiently progressive; otherwise the objectives of the social protection system are undermined by the tax burden placed on the poor and vulnerable population groups. Similarly, contributory schemes need to take the contributory capacity of persons covered into account. The financial sustainability of the social protection system also greatly depends on the government’s ability to enforce existing tax and contribution obligations. Financial sustainability also requires that provisions are made for the system to be able to respond to shocks or crises.

Photo credit: “Bamboo” by Phil Dokas (CCBY 2.0 via Flickr).


Expert Commentaries

Human Rights in an Age of Austerity: casualty or compass?

Ten years since the global economic crisis, social and human rights protections have fallen victim to austerity measures in countries across the globe. Preventing another “lost decade” will require us to see human rights values not as merely collateral damage of economic policy, but as cogent and universal norms actively guiding tough fiscal dilemmas in […]

Legal Instruments

Social Protection Floors Recommendation, 2012 (No. 202)

Recommendation No. 202 is the first international instrument to offer guidance to countries to close social security gaps and progressively achieve universal protection through the establishment and maintenance of comprehensive social security systems. To this aim, the Recommendation calls for (1) the implementation, as a priority, of social protection floors (SPF) as a fundamental element […]


CAC 40: Des Profits Sans Partage — Comment les grandes entreprises française alimentent le spirales d’inégalités

En 2017, 82 % des richesses créées dans le monde ont bénéficié aux 1 % les plus riches, alors que les 50 % les plus pauvres n’en ont reçu que des miettes. La France n’échappe pas à cette tendance : les 10 % les plus riches détiennent plus de la moitié des richesses nationales quand […]

A Simplified Social Protection Scheme for Micro-entrepreneurs

To encourage entrepreneurship and reduce social and tax evasion, the Government of France introduced a simplified mechanism in 2009. It facilitated the creation of micro-enterprises, collected taxes and encouraged affiliation of self-employed workers to the social security system. The scheme has led to the creation of 911,000 micro-enterprises till date.

Report of the Special Rapporteur on extreme poverty and human rights on his mission to the United States of America (A/HRC/38/33/Add.1)

The Secretariat has the honour to transmit to the Human Rights Council the report of the Special Rapporteur on extreme poverty and human rights, Philip Alston, on his mission to the United States of America from 1 to 15 December 2017. The purpose of the visit was to evaluate, and report to the Human Rights […]

The Case for a Progressive Tax: From Basic Research to Policy Recommendations

This paper presents the case for tax progressivity based on recent results in optimal tax theory. We consider the optimal progressivity of earnings taxation and whether capital income should be taxed. We critically discuss the academic research on these topics and when and how the results can be used for policy recommendations. We argue that […]

Tax on Large Fortunes: the recent international debate and the situation in Brazil

Many discussions have taken place in Brazil about legislation pertaining to the Tax on Large Fortunes (Imposto sobre Grandes Fortunas—IGF). In the current scenario, with the country facing a second consecutive annual decrease in tax revenue, the subject of the implementation of the IGF is gaining some traction, with its proponents vehemently arguing that it […]

Redistributing Unpaid Care Work – Why Tax Matters for Women’s Rights

Globally, women perform the great majority of unpaid care work. This unjust distribution of labour has profound impacts on women’s human rights and is both a product and a driver of gender inequality. Despite the obligations of the State to ensure economic policies are non-discriminatory and prioritize human rights, today regressive tax policies and underfunded […]

IMF Monitor

The website makes the first comprehensive and transparent database of IMF-mandated policy reforms  freely available to interested researchers and civil society organizations. The database systematizes the 58,406 conditions applicable to IMF programmes over the 1980-2014 period. The data was extracted from countries’ loan agreements with the IMF. This resource enables nuanced explanations of the economic, social […]

From Expansion to Austerity: challenges and risks of the radical fiscal policy turn in Brazil (One Pager 360)

Brazil, in the period after the great financial crisis of 2007–2008, presents a compelling case study of the interactions between fiscal policy and business cycles. The country is noteworthy not only for being one of the very few that dealt relatively well with the most acute stage of the crisis, maintaining its dynamism throughout most […]

Brazilian Fiscal Policy in Perspective: from expansion to austerity

This paper analyses the changes in orientation and composition of Brazilian fiscal policy, focusing on three recent periods and seeking to explore their relationship with economic performance. The first period (2005–2010) was characterised by fiscal expansion, with public investment and redistributive transfers as its main drivers. Economic performance was extraordinary. During the second period of […]

Playing with Fire: deepened financial integration and changing vulnerabilities of the Global South

From the early 1990s many emerging and developing economies (EDEs) liberalized their capital accounts, allowing greater freedom for international lenders and investors to enter their markets, as well as for their residents to operate in international financial markets. Despite recurrent crises, liberalization has accelerated in the new millennium. Global financial integration of EDEs has been […]

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