Delegates at the fourth ITD Global Conference entitled 'Tax and Inequality', which took place in New Delhi between the seventh and ninth of December, tried to identify which policies have failed and which could play a greater role in reducing inequalities in the future.

At the event R S Gujral, finance and revenue secretary of India, said that many suggestions were made over the course of the conference as to how tax can help in reducing inequalities, but “participants recognise there is no silver bullet. The solutions need to be adapted to the state of economic development and demographics. Only after taking into account these different factors can the appropriate tax policy response to growing inequalities be addressed,” he said.

During the two and a half day programme, participants addressed the tax issues raised by economic developments and globalisation that have affected the distribution of income, wealth, and living standards in countries over recent years. Income inequality between countries has diminished significantly as economic reform in many emerging economies has spurred growth, significantly reducing levels of absolute poverty globally.

However, recent decades have also seen significant changes in the distribution of both wealth and incomes within countries, with notable increases in the share of income enjoyed by those at the very top of the income distribution in many countries. A rising tide has not lifted all boats.

“Addressing growing inequalities is now at the centre of the political debate and all countries are taking different actions to address it, said Rintaro Tamaki, deputy secretary-general of the OECD. 

He said: “Increasing inequality reaches far beyond economic implications, raising a number of political and ethical questions which have wide-ranging consequences for the future of all societies.”

“Globalisation and the sustainable growth path of many economies in transition and developed countries have produced impressive results in terms of economic growth, social development and poverty reduction.  However, the benefits of stronger growth have not always been shared equally and income inequality has remained at very high levels. Achieving greater equality as a key to social cohesion remains a priority for every society,” he added.

The event was hosted by the Finance Ministry of India and organised by the International Tax Dialogue. The ITD is a joint initiative of various organisations working on tax issues – the IMF, the OECD, the World Bank, the European Commission, the IADB, and CIAT.