How do Taxes Drive the Sustainable Development Goals?

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By Thomas Beloe and Ahtesham Khan in IPS, 7 May 2024

Tax revenue remains the most sustainable source of income for governments and plays a crucial role in financing the Sustainable Development Goals (SDGs). It diminishes the need for international assistance and contributes to the repayment of burdensome debt, ultimately strengthening a country’s ability to withstand external shocks.

In 2022, UNDP, in partnership with the Governments of Finland and Norway, launched the Tax for SDGs Initiative with the aim to help countries enhance domestic resource mobilization and advance their progress towards the SDGs.

Under the Initiative, taxation is considered both a tool for revenue collection and a policy instrument to encourage sustainable growth strategies and influence behaviour towards desired outcomes related to climate, nature, well-being and governance.

In 2023, Tax for SDGs made significant headway, signing a total of 22 Country Engagement Plans (CEPs). Through the CEPs, the Tax for SDGs supports governments in addressing tax avoidance, tax evasion and other illicit financial flows, particularly through technical assistance and cooperation facilitation.

It also supports them in aligning their tax and fiscal policies with the SDGs and incorporates perspectives from developing countries into regional and international discussions about taxation.



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