Kuala Lumpur, 18 May 2025 — As negotiations for a landmark United Nations tax convention gain momentum, the United Nations University International Institute for Global Health (UNU-IIGH) has released a new briefing paper that reframes taxation as a foundational determinant of health, social justice, and democratic governance. Entitled “Tax Systems and Policy: Crucial for Good Health and Good Governance”, the paper spotlights a five-function framework – revenue, redistribution, representation, repricing and regulation - to assert the critical need to rebuild equitable and effective tax systems, especially in low- and middle-income countries (L&MICS), for improving health outcomes, fostering inclusive democratic governance, and reducing socio-economic inequalities.
Launched alongside key side events of the 78th World Health Assembly, the briefing positions tax justice as a central pillar of the global health agenda, foregrounding the systemic impact of tax avoidance and the use of tax havens - which contributed to the estimated $492 billion in global revenue losses for 2024 - and its undermining of the fiscal capacity of public institutions to deliver equitable and sustainable health services.
Despite evidence linking taxation to improved health and societal well-being, the paper spotlights how current global tax systems are increasingly failing to deliver on their fundamental functions. Many L&MICs face regressive tax structures, chronic under-collection, and reliance on narrow tax bases, resulting in insufficient public revenue, extreme wealth concentration, and eroded public trust. The consequences are irrefutable: in 2023, over 50% of the global population lacked access to essential health services and 2 billion people faced financial hardship or catastrophic expenditure due to healthcare costs.
At the core of this financial dysfunction lies what the authors describe as a dominant ‘tax consensus’, a legacy of neoliberal orthodoxy that emphasises economic neutrality, discourages direct taxation, and sets minimal public revenue targets, typically between 15-20% of GDP, thereby undermining fiscal space for health and social investment in L&MICs.
Speaking at the virtual launch of the paper, Liz Nelson, Director of Advocacy and Research for the Tax Justice Network, spotlighted the exclusionary foundations of this consensus and examines the structural power inequities it reinforces, noting that “Is it really a consensus? The nature of the tax consensus is and always has been limited to a consensus of OECD and high-income countries. It has created greater inequality among countries, and the harm has been largely created by individuals in high income countries, impacting those in low-income countries.”
International tax regimes, rooted in colonial-era arrangements and still governed by OECD-centric norms, further enable aggressive base erosion and profit shifting (BEPS) by transnational corporations via opaque legal entities and offshore financial centres. On average, lower-income countries lose about 36% of their public health budgets to large-scale corporate tax abuses. These structural distortions weaken domestic resource mobilisation, exacerbate health inequities, foster corruption, and undermine good governance.
Despite decades of rhetorical commitments by the G20 and OECD, the scale of global tax abuse has continued to expand.
Against this backdrop, "Tax Systems and Policy: Crucial for Good Health and Good Governance" calls for systemic tax reform as a global health imperative. Key recommendations include instituting progressive direct taxation to redress income and wealth disparities, strengthening tax administration and enforcement capacity, and integrating transparency mechanisms such as public access to data on tax collection and disaggregated country-by-country reporting. Concurrently, unilateral defensive measures against BEPS and financial secrecy must be deployed, while fiscal justice must simultaneously encompass sovereign debt cancellation and globally redistributive taxation to finance ecological and reparative obligations.
Crucially, the brief positions the ongoing UN-led negotiations as an opportunity to address the failings and deficiencies of current tax systems and policies, emerging as a more inclusive and potentially enforceable alternative to the OECD’s asymmetrical regime.
By positioning taxation as a structural determinant of health, this policy brief calls researchers, global health practitioners, policymakers, and civil society representatives to engage actively with tax reform not as a peripheral financial and economic issue, but as a core mechanism for achieving global health equity and accountable governance systems.
At the launch, Prof. David McCoy, Research Lead at UNU-IIGH, also underscored the inherently political nature of the engagement to address tax systems failures, stating that "Countering plutocratic and oligarchic power is important, and that requires the mobilisations of people. It’s a political challenge, not a technical or technocratic challenge. So, we need to engage with the political process to solve it.”
