Reforming fiscal policies to reduce inequalities and eradicate poverty (SDG 1, 10)

The document advocates for a progressive tax agenda to address extreme poverty and wealth concentration, particularly in Sub-Saharan Africa. It proposes several instruments: Financial Transaction Taxes (FTTs) to curb speculation and raise billions annually; net wealth taxes to target the super-rich; property taxes to leverage immobile assets; and Resource Rent Taxes (RTT) for the extractives sector. Using South Africa as a case study, the brief demonstrates that a combination of these taxes could generate substantial revenue to fund social protection, healthcare, and a Universal Basic Income Guarantee, potentially increasing GDP growth.

• Sub-Saharan Africa faces severe poverty and wealth concentration, with over 389 million people living in extreme poverty in 2018 and the wealthiest 10% owning more than half of the region's wealth.
• African tax structures are disproportionately reliant on regressive consumption taxes compared to other regions; in 2021, VAT accounted for 27.8% of total tax revenue in Africa, compared to 25.6% in the Asia-Pacific and 20.2% in the OECD.
• A Financial Transaction Tax (FTT) could generate significant global revenue, with estimates ranging from $200 billion to $900 billion annually depending on the rates and types of taxes applied.
• Wealth taxes on the world's richest individuals are proposed as a means to fund social protection and a just transition, with an estimate that taxing the richest 3,000 people globally could raise approximately $250 billion.
• Property taxation is identified as an underutilised revenue source in developing countries, which collect only 0.5% of GDP from property taxes compared to 2% in developed countries.
• In South Africa, implementing a progressive net wealth tax of 3-7% could raise between R70 billion and R160 billion, while a broader Financial Transaction Tax at 0.1% could generate over R40 billion.
• A 'high-ambition' basic income grant scenario in South Africa, funded by progressive taxation, is estimated to increase average GDP growth from 2.2% in 2023 to 3.5% by 2030.

APA

Mncube, Z., & Mochoge, D. (2024). Reforming fiscal policies to reduce inequalities and eradicate poverty (SDG 1, 10). African Forum and Network on Debt and Development. https://afrodad.org/news-events/articles/taxation-wealth-eradication-poverty-and-inequality

Chicago

Mncube, Zimbali, and Diana Mochoge. Reforming fiscal policies to reduce inequalities and eradicate poverty (SDG 1, 10). African Forum and Network on Debt and Development, 2024. https://afrodad.org/news-events/articles/taxation-wealth-eradication-poverty-and-inequality.

Wikipedia

{{cite report |last1=Mncube |first1=Zimbali |last2=Mochoge |first2=Diana |title=Reforming fiscal policies to reduce inequalities and eradicate poverty (SDG 1, 10) |publisher=African Forum and Network on Debt and Development |date=12 September 2024 |url=https://afrodad.org/news-events/articles/taxation-wealth-eradication-poverty-and-inequality |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{mncube2024reforming, author = {Mncube, Zimbali and Mochoge, Diana}, title = {{Reforming fiscal policies to reduce inequalities and eradicate poverty (SDG 1, 10)}}, institution = {African Forum and Network on Debt and Development}, year = {2024}, month = sep, url = {https://afrodad.org/news-events/articles/taxation-wealth-eradication-poverty-and-inequality}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }