UN proposes to raise $400 b in novel taxes

UN proposes to raise $400 b in novel taxes

Aimed at financing development in emerging economies

In what is expected to come handy for India at time when the country is looking for fund to finance its developmental projects including infrastructure, the United Nations has proposed to raise $400 billion each year through a host of new taxes, to finance development in emerging economies.

Taxes ranging from carbon emissions, to a lesser heard billionaire’s tax have been planned by the world body, the proceeds of which will be shared between the lesser developed countries and used to fight global challenges such as climate change and poverty.

In its annual report ‘In Search of Development Finance’, released on Friday, the world body said, in the midst of difficult financial times, many donor countries have cut back on development assistance. In 2011, for the first time in many years, aid flows declined in real terms. It said that the need for additional and more predictable financing has led to the search for new sources. Releasing the report in New Delhi, Chief Economist at United Nations Economic and Social Commission for Asia and the Pacific, Nagesh Kumar said that the official development assistance, which is an important source for financing development in low income countries, have shrunk by 3 per cent in 2011.

He said these taxes will help immensely when the world is looking for innovative ways to finance development. Kumar said, the carbon tax may yield a double dividend reducing green house gas emissions and generating additional development financing.

Similarly, a tax on the wealth of the world’s richest individuals will be both fair and efficient, according to Kumar. Among his other proposals are an air passenger ticket levy called a “solidarity contribution”. The proceeds can be used to procure essential medicines for poor. At present, nine countries impose a small tax on air passenger tickets and donate the proceeds to UN.

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