LocationsTax administrators, policy makers and relevant key stakeholders came together to understand the critical role taxation and fiscal policies play in helping countries to achieve the Sustainable Development Goals.
Leveraging taxation to accelerate progress on SDGs
August 20, 2023
UNDP Bhutan/Norbu Zangmo
Taxation and fiscal policies are powerful tools to raise domestic resources critical for financing achievement of the Sustainable Development Goals (SDGs). To understand how this works, tax administrators, policy makers and relevant stakeholders from the government took part in a five-day sensitization workshop.
The workshop was delivered by a team of tax experts from UNDP who was in the country on a Sustainable Development Goals Taxation Framework (STF) mission. The STF is a comprehensive diagnostic framework that evaluates the coherence of tax systems of a country with specific SDG targets.
Aimed at developing and reinforcing a shared understanding of various interlinkages between tax and the SDGs, the workshop looked at how cooperative approaches can bring better results for all stakeholders.
“Leveraging taxes to boost domestic resource mobilization has never been more important than now. Like the rest of the world, Bhutan’s economy remains strained by the COVID-19 pandemic. In addition, fiscal challenges caused by global economic crises are hindering progress on the SDGs,” said Director General, Department of Revenue and Customs.
UNDP Bhutan/Norbu Zangmo
The sensitization workshop was conducted as a part of the “Tax for SDGs Initiative”, a partnership between the Department of Revenue and Customs, Ministry of Finance and UNDP. The Country Engagement Plan for this initiative was signed in March 2023.
The initiative is supporting Bhutan in its efforts to enhance domestic resource mobilization through a strengthened tax base, foster a stronger connection between development financing and taxation, and consequently align tax and fiscal policies with international standards to achieve the SDGs.
The workshop looked at how well-targeted tax and fiscal policy can encourage behavioral changes that could help realize desired environmental and gender equality outcomes in support of SDG 5 Gender Equality and SDG 13 Climate Action.
“The current discriminatory tax and economic structures across the world continue to perpetuate gender inequality,” said Caroline Othim, Technical Expert on Tax and Gender Equality. “Countries, including Bhutan, therefore, need to take action now to reform their tax and fiscal policies as one of the measures contributing to creating gender-equal economies and happier societies.”
Dr Tatiana Falcao, Technical Expert on Tax and Environment, UNDP
UNDP Bhutan/Dechen Wangmo
In terms of how taxation can help promote climate action, Dr Tatiana Falcao, Technical Expert on Tax and Environment said introduction of a carbon tax in Bhutan could help the country achieve the heightened protection standards that are required under its constitution, and to guarantee a sustainable growth pattern for the economy. “This could be achieved by ensuring environmental cost of doing business is incorporated into every economic activity undertaken by businesses, old and new in Bhutan.”
UNDP experts and the DRC also explored tax policy priorities and ways to align the priorities with ongoing capacity-building efforts and promote collaborative initiatives aimed at establishing synergies between taxation and the SDGs.
