Over
400 senior tax policymakers and administrators from 90 countries gathered in
New Delhi last week, to address the role of taxation in reducing
inequalities in income and wealth.

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.