UNDP’s Tax for SDGs Initiative launched its 2023 Annual Report
Tax revenue remains the most sustainable source of income for governments and plays a crucial role in financing the Sustainable Development Goals (SDGs). It diminishes the need for international assistance and contributes to the repayment of burdensome debt, ultimately strengthening a country’s ability to withstand external shocks.
In 2022, UNDP, in partnership with the Governments of Finland and Norway, launched the Tax for SDGs Initiative with the aim to help countries enhance domestic resource mobilization and advance their progress towards the SDGs. Under the Initiative, taxation is considered both a tool for revenue collection and a policy instrument to encourage sustainable growth strategies and influence behaviour towards desired outcomes related to climate, nature, well-being and governance.
In 2023, Tax for SDGs made significant headway, signing a total of 22 Country Engagement Plans (CEPs). Through the CEPs, the Tax for SDGs supports governments in addressing tax avoidance, tax evasion and other illicit financial flows, particularly through technical assistance and cooperation facilitation. It also supports them in aligning their tax and fiscal policies with the SDGs and incorporates perspectives from developing countries into regional and international discussions about taxation.
Additionally, Tax for SDGs has launched the draft SDG Taxation Framework (STF) (Diagnostics), a tool designed to help national governments assess and align their tax systems with the SDGs effectively. The draft STF (Diagnostics) was piloted in nine focus countries (Armenia, Bhutan, Djibouti, Nigeria, Sri Lanka, Tanzania, Togo, Uzbekistan and Zimbabwe) for selected SDGs based on countries’ priorities. Over 1,500 personnel from 74 government entities have been trained and reported capacity enhancement.
In the words of Achim Steiner, UNDP Administrator:
The success of the Tax for SDGs Initiative is a testament to the collaborative efforts among nations, international organizations, academia and civil society. Together, we have exchanged best practices, knowledge and lessons learned, creating a community dedicated to enacting real change.”
Achim Steiner, UNDP Administrator
Gap in the report: Alcohol taxation not mentioned
Key word search quickly shows a serious gap in the report and the work of the Tax for SDGs Initiative: there is zero mention of alcohol taxation.
Tobacco taxation is mentioned six times. In Armenia, the UNDP provided technical assistance for tobacco tax revenue modelling as well as modelling of the impact an increased excise duty on tobacco will have on health, the results of which helped support legislative changes in Armenia’s excise tax on tobacco. In the report, UNDP writes that similar work on sugar and/or sugary beverages was ongoing.
The key word “health” is only mentioned 39 times throughout the report. In some cases this could include alcohol taxation, such as in Zimbabwe, where work is being done to highlight the potential of health tax reforms.
The report also mentions Djibouti targeting SDG-aligned tax policies for addressing poverty, inequality, employment, education, health, and climate change (carbon taxation). This could include alcohol taxation, but is not clear from the report.
A third country the report mentions is Lebanon. The Deputy Prime Minister of Lebanon had
sought technical advisory support from UNDP for various ad hoc tax committees under his leadership. Initial meetings with Tax for SDGs experts focused on SDGs 1 (poverty), 3 (health), and 10 (inequality) to design a wealth tax and related excise taxes on luxury goods.
The report also contains a short section on “tax and health” where the potential of tax and fiscal policies in achieving the SDGs is briefly addressed, beyond domestic revenues generations but also as measures to help achieve social outcomes related to health, inequality, gender, and the environment among others.
The report says: “The Initiative responded to heightened interest in the profound influence that tax policies can have on health outcomes.”
And the countries mentioned in this context are Armenia, Zimbabwe, and Ghana.
In Ghana the Tax for SDGs team worked with the UNDP headquarters team and the Fiscal Policies
for Health Unit of WHO to provide a package of technical assistance on health taxes for the Government of Ghana, civil society, and academia. This included the modelling of expected additional excise tax revenue and a health tax policy brief which were used to support the passing of a new Excise Tax Law in April.
A high-level United Nations General Assembly side event highlighted the critical role of fiscal policies notably taxation in promoting wellbeing and stressed leveraging taxation for public health amidst global crises aligning with sustainable well-being imperatives.
Potential of alcohol taxation for achieving the SDGs
In 2022, Movendi International published a Special Feature on “Alcohol Policy As Catalyst For Sustainable Development and the Triple-Win Benefits of Alcohol Taxation”. With this Special Feature, Movendi International provided state of the art evidence on both alcohol is an obstacle to 14 of the 17 SDGs, as well as alcohol taxation as a catalyst for achieving multiple SDGs.
Kristina Sperkova, International President of Movendi International comments:
It is surprising to see that UNDP’s Tax for SDGs Initiative has not done any work on alcohol taxation in the past year.
We know how massive of an obstacle alcohol is for reaching the SDGs, how cross-cutting and severe its impact is in the social, economic, and environmental dimensions of sustainable development.
And we know how huge and untapped the potential of alcohol taxation is to help achieve multiple SDGs.
Supporting countries in raising alcohol taxes should be a critical part of the Tax for SDGs Initiative.”
Kristina Sperkova, International President, Movendi International
In 2019, the Fiscal Policy Task Force issued a report finding that increasing taxes on alcohol so that alcohol prices grew by 50% would help avert almost 22 million deaths. Almost 560 million years of life could be gained from such an alcohol tax increase.
The report also found that raising alcohol taxes would bring in the most additional revenue – compared to tobacco and sugary drinks tax increases – in large part because alcohol taxes are currently low and consumption is widespread.
Over 50 years a tax that increases alcohol prices by 50 percent over current levels could generate almost US$17 trillion in additional revenues in present discounted value.
This would be three times more than the BRICS country governments collected in revenues in 2017 (US$5.4 trillion).
A recent worldwide overview showed: the economic costs of harm due to alcohol amount to 1306 Int$ per adult, or 2.6% of the GDP. About one-third of costs (38.8%) were incurred through direct costs, while the majority of costs were due to losses in productivity (61.2%).
And poverty is in many ways – at least 7 – connected to alcohol and impacts all levels from individuals and families to communities and societies in general.
This indicates that addressing alcohol harms is crucial for achieving sustainable development.
Landmark study on social and development benefits of alcohol taxation
In a new peer-reviewed paper, researchers of the Copenhagen Consensus Center examined the benefit-cost analyses of various NCD interventions in low-income (LICs) and lower–middle–income (LMCs) countries. The analyzed 30 interventions recommended by the Disease Control Priorities Project, including six intersectoral policies, such as taxes and 24 clinical services. Using a previously published model to estimate intervention costs and benefits through 2030, researchers found that intersectoral policies often provided great value for money.
They conclude that there are several cost-beneficial opportunities to tackle NCDs in LICs and LMCs. In countries with very limited resources, the best-investment interventions could begin to address the major NCD risk factors, especially tobacco and alcohol, and build greater health system capacity, with benefits continuing to accrue beyond 2030.
Improving alcohol policies could reduce overall alcohol consumption and avert 150,000 deaths over the rest of the decade until 2030.
Each dollar spent on alcohol policy development will deliver $76 of social benefits.
An alcohol tax increase alone can generate large, if slightly lower, benefits at $53 back on the dollar.
Another Movendi International analysis also shows the concrete potential of alcohol taxation for concrete SDGs – something the Tax for SDGs Initiative says it aims to support countries in addressing.
Alcohol taxation helps achieve SDGs 1 (poverty eradication), 3 (health for all), 4 (quality education), 5 (gender equality), 8 (economic growth and productivity), 10 (equity), 11 (safe cities), 16 (freedom from violence), and 17 (partnership).
Clearly, alcohol policy in general and alcohol taxation in particular are very sound investments in reaching the SDGs.
The joint OECD/UNDP Tax Inspectors Without Borders initiative
The Tax for SDGs Initiative includes the joint OECD/UNDP Tax Inspectors Without Borders (TIWB) initiative, which operates 59 ongoing programmes across Africa, Asia and the Pacific, the Arab States, Europe and Central Asia, and Latin America and the Caribbean.
It is a unique approach to capacity building that deploys experts to developing country tax administrations to provide practical, hands-on assistance on current audit cases and related international tax issues.
With support from international partners and countries, including France, India and Italy, TIWB has secured in 2023, US$230 million in additional tax revenue collected by developing countries and $1.11 billion in additional tax revenue assessed, totalling $2.30 billion collected and $6.05 billion assessed overall since its launch in 2015.
Tax for SDGs Initiative events
To facilitate the inclusion of developing countries in global tax discussions, the Tax for SDGs Initiative held several events. These included a session with the World Health Organization during the UN General Assembly in September and the second 2023 Dialogue on Tax and SDGs, which convened 400 policymakers from 61 countries, including 14 ministers, alongside tax officials, diplomats and thought leaders from 48 organizations.
These discussions enhanced understanding of the connections between taxation and the SDGs, fostered peer-to-peer exchange, developed interdisciplinary tax approaches, and explored innovative tax measures for sustainable development.
Moreover, the Initiative organized missions, workshops and a national dialogue with parliamentarians, youth, researchers and taxpayers to assist tax authorities in capacity building and implementing SDG-aligned policies.
Marcos Neto, in his opening speech at the 2024 ECOSOC Financing for Development Forum side event on Tax for SDGs, emphasized the work of the Initiative:
By building on the success of the Tax for SDGs Initiative, we aim to provide countries with the tools and expertise needed to align their tax and budget policies with sustainable development objectives.”
Marcos Neto, UN Assistant Secretary-General and Director of UNDP’s Bureau for Policy and Programme Support
Progress across regions
Tax for SDGs achieved significant progress across regions.
In Africa, it launched Country Engagement Plans and Tax Inspectors Without Borders programmes, emphasizing digitalization and policy integration such as Tax and Gender Initiatives.
In Europe and the Commonwealth of Independent States, Tax for SDGs facilitated the implementation of key legislative reforms in Armenia and Uzbekistan.
The Arab States, with the support of the Initiative, improved digital tax administration and climate-related tax policies, notably in Lebanon and Egypt.
The Americas: Tax for SDGs also initiated programmes in Peru and Saint Lucia and contributed to digitization reforms in Honduras.
In the Asia-Pacific region, fiscal policies were strengthened, and taxpayer trust was built through strategic partnerships.
Download the full report
Download the UNDP’s Tax for SDGs Initiative 2023 Annual Report here (PDF)
The 2023 Annual Report details the Initiative’s engagements with 25 focus countries and highlights key regional and thematic developments. Additionally, it provides an overview of the results achieved by the joint OECD/UNDP Tax Inspectors Without Borders Initiative, which forms an integral component of Tax for SDGs engagements.
