While our supporters successfully campaign here by lobbying MPs and TDs in the UK and in the Republic of Ireland, one partner in the Dominican Republic has launched its own campaign that has at its core the call for increased funding on education.
Changing face of poverty
The face of poverty is changing. Today more than three quarters of the world’s poor live in middle income countries. The Dominican Republic is bang on trend. On the face of it this is a country doing very well – the economy is growing, and it bounced back quickly from the global financial crisis.
But because of regressive tax policies and a failure to address poverty issues, the already high levels of inequality here are actually getting worse.
Christian Aid’s Trace the Tax campaign is all about making sure that tax systems aren’t cheating the poor. Like so many other developing countries, the Dominican Republic misses out on a large amount of tax due to tax evasion and transfer mispricing.
In fact, if you put together the amount of money that the government there misses out on annually through national sales tax evasion (US$687m) and through the manipulation of prices of exports and imports (US$128m), you could almost double the social spending on education.
Education, education, education
This is exactly what our partner Centro Montalvo is calling for. Around 12% of the adult population are illiterate here, with levels as high as 30% among certain groups.
Centro Montalvo's ‘Educación Digna’ campaign.
With a £10,000 Christian Aid grant, Centro Montalvo helped launch a campaign that has caught the imagination of Dominicans around the world.
The campaign became a coalition ‘Educación Digna’ and calls for changes to the budget to allow an increase in spending on education from 2.2% to 4%.
Not only is this not much to ask (Nicaragua is calling for 6%), but 4% GDP on education is already enshrined in law.
Our tax campaign will be a success not only when we see more transparent international financial systems and fairer national tax systems, but critically also when we see those systems benefitting the poor.
Centro Montalvo is a perfect example of a partner working to address all these issues. It is engaging with regional tax justice networks and highlighting the need for national tax reform.
Its 2010 report found that the poor in the Dominican Republic pay proportionately pay much more of their income in tax than the rich. VAT is a huge part of the government’s tax take, and everyone pays this no matter how poor they are. There are huge tax exemptions for businesses operating in free-trade zones, as well as the tourism industry.
Importantly, Centro Montalvo has a great history of working to help people understand the role they play in monitoring budget and social spending.
That is also at the heart of the ‘good education’ campaign, and this work is how we can be confident that if more tax revenue is generated for the Dominican government, their people will hold them to account for how they spend it.