Work Areas

Tax Power

Tax Power 1 - The local context

Tax Power 1 - The local context

Key ideas:

  • Tax is a compulsory contribution of money paid by citizens or businesses to government when they earn money and when they buy products and is used to pay for local or national common services such as schools, health clinics, roads and government salaries. Practically everyone pays tax.
  • Tax is fair when it helps reduce poverty and fulfil human rights, that is, when tax takes little from the poor, more from the rich and when taxes are used to pay for public services. This means that VAT is low, that tax exemptions exist for basic products that help poor people, that tax is not charged many times on the same thing, and that no huge tax increases happen for poor people year on year.
  • We all must contribute to paying tax but we must ensure it is a fair tax.
  • A ‘public’ service is not a gift from the government, but something we all have paid beforehand through tax. Services are a right for all, even for those who pay little or no tax.
  • Taxes paid locally by people living in poverty may be a small amount of the national budget when compared to taxes people pay monthly on their salary or the taxes big companies pay. But, high local taxes or a sharp increase in them can really hurt poor people on a daily basis because they are a large portion of poor people’s money they spend.

Possible tools:

  1. Tax role play – introducing local tax issues
  2. The tax stones – how is tax collected and spent?
  3. The teacher, the vendor and the farmer – do you pay tax?
  4. The shopping list – what is ‘VAT’?
  5. The market mountain – what market tax problems exist?

Resources

Resources

Here you can download some useful resources.

Tools in this toolbox

Role play - understanding tax

The idea of ‘tax’ is explored through a role play. Topics should be chosen according to their relevance to the local context, f...

The market mountain - multiple taxation

Participants explore tax problems at the market place, including the idea of ‘multiple taxation’, by collectively interviewing ...

The tax stones

To introduce the idea of tax systems that help the poor (tax justice), to explore links between paying taxes and having service...

What is VAT? The shopping list.

Participants discuss what ‘VAT’ and ‘VAT  exemptions’ are by looking at local products they have bought recently. Objec...

Who pays tax? The teacher, the vendor and the f...

The facilitator uses a series of questions to three taxpayers (a teacher, a market vendor and a farmer) to introduce the idea o...

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