It is time to talk taxes. If more domestic revenue is not found, the Sustainable Development Goals, especially SDG 4 on quality education, will simply become one more set of international unmet promises.
Expanding tax revenue…
Most countries do not levy progressive income taxes. And for those that have them, with rare exceptions, they have become less progressive at the high end of the income level.
The same is true for corporate taxes. There have been competitive reductions of those taxes complicated by tax evasion and avoidance. The G20 agreement to set a minimum corporate tax rate of 15 per cent is an important step in reversing that process even if the level is low.
The devil is in the details, however. For example, most of the digital giants, Google, Amazon, Facebook, Apple, Microsoft, are located on the West Coast of the United States. They are global companies that make money all over the world. They, with their Chinese counterparts, are also the richest companies in the world. However, they pay few, if any, taxes. If that were to change, enormous resources could be collected and channelled to education and other public services.
Although global solidarity is important for education, its impact should not be exaggerated. Ninety-seven per cent of the education budget comes from domestic resources.
Aid and loans are short-term and unpredictable. It is only reliable and dependable public domestic investment that can produce effective education systems of high quality.
At the moment, public domestic investment in education falls far short of needs, but also of agreed goals. Although that is true for too many developed countries, the situation is worse in developing countries. On average, countries are only investing 4.4 per cent of GDP in education, rather than the minimum 6 per cent of GDP or 20 per cent of the national budget recommended for developing countries. For African countries, the allocation is only 16.8 per cent of total public expenditure on education, far short of the minimum 20 per cent.
…to invest sustainably in quality inclusive education and qualified teachers
Quality education depends on quality teachers. Students and parents know that, and all authoritative and serious international studies show that. Who pays for teacher salaries? Where does the money come from? Who pays for initial teacher training and continuous professional development? The only long term, predictable, sustainable source of funding is taxes.
Even though teacher salaries are often far too low, salaries are often the largest single item on education budgets. That makes sense – nothing is more important for quality learning than a quality teacher in every classroom.
Aid and loans may pay for buildings or books, but governments will not recruit more teachers unless they have security that the money will continue to come in. Therefore, action to address the acute shortage of teachers around the world depends on action to increase tax revenues and ensuring that a fair share of these resources goes to education.
The under-funding of education and the uncertainty of education funding has led to de-professionalisation and casualisation of the teaching profession, most notably in Africa. Many governments continue to recruit unqualified teachers; teachers are often put-on short-term contracts, barely making a living wage and having to work in near impossible conditions.
This has got to come to an end - we need to rebuild the teaching profession, address teacher shortages, and pay decent salaries no less than those of professionals with similar qualifications in other sectors. This can only happen through action to increase tax revenues – because you cannot build for the long term without having a long-term funding base.
Scrutiny and transparency in the use of funds are critical
It is not helpful, however, to levy taxes to support education if that revenue does not make a difference in the classroom. I recall a discussion with donor countries where the leader of one of our African member organisations reported that his country had met their target for education funding. However, he also said that, before the increase in funding, he had over 90 students in his class and that, afterwards, he still had over 90 students.
It is not enough to levy taxes. There must be transparency and strict rules and procedures that can guarantee that more money means progress for the country. Citizens must be able to trust their governments to use tax money for the public, not personal good.
Public education has a crucial and irreplaceable role in development and in building fairer, more equal societies. Some governments have sought quick fixes through privatisation or public-private partnerships. They have not worked. They have often made systems of education even less transparent and have contracted out government responsibilities to corporations that may be accountable to shareholders, but do not answer to the communities in which they operate.
How can international actors like GPE support post-pandemic recovery?
The COVID-19 pandemic has made the financial straits of countries worse. But, it has also, seriously damaged education. In Africa, our research shows that, in many countries, education effectively shut down with school closures. Distance learning meant little or no learning.
In African and many other developing countries, the pandemic is far from over and the gaps between the educational opportunities of our students and the rest of the world will only widen. That makes a radical shift in financing even more necessary.
In our integrated world, tax issues are national, but they are also regional and global. It is important that global institutions address, frankly and directly, the need for effectively administered, transparent, and fair systems of taxation.
The Global Partnership for Education (GPE) is a unique global institution. It is the only global fund dedicated to improving education in developing countries. It works with 76 low-income countries and has the active participation of developing country partners, donor countries, education unions, civil society, and other sectors.
I was pleased to represent Education International at a GPE side meeting on 27 July. It was a frank and interesting discussion with representatives of international organisations, governments, students, civil society, and tax experts about the need to generate revenue to finance education through taxes. Although EI has long been preoccupied with this issue, there has not yet been enough reflection and action nationally, regionally, and globally.
GPE could break exciting new ground by stepping up its work on tax issues. The Partnership can catalyse action and support low and middle-income countries to raise their tax to GDP ratio from the current 17 per cent to that of developed countries which is twice as much. We also need to challenge aggressive tax avoidance, tax evasion, tax holidays and corruption which continue to haemorrhage resources out of our countries.
It is vitally important that GPE uses its tools to ensure that none of the partner countries fails to meet internationally agreed education funding benchmarks. No country should substitute its national budget allocation with the GPE grant.
The exercise of the right to quality education for all requires substantial investment in education and teachers. That means adequate and fair taxes.
GPE, international financial institutions, other international bodies and governments need to act now to guarantee that right.
Especially at a time of extreme stress and emergency in our global community, words without action are unacceptable.
The opinions expressed in this blog are those of the author and do not necessarily reflect any official policies or positions of Education International.