New study: Corporate taxes a key driver of sustainable development

Monday 20 March 2023

A new study published in Globalization and Health and led by the School of Medicine has highlighted the role corporate tax revenue can play in achieving the United Nations’ sustainable development goals (SDGs). Researchers from the School’s Infection and Global Health and Population and Behavioural Science divisions collaborated with the University of Leicester and the African Centre for Tax and Economic Studies (ACTES) to conduct a case study of Vodafone Group Plc. Their findings revealed that tax revenue generated from the company’s operations in six sub-Saharan African countries helped improve access to the determinants of health (clean water, basic sanitation, and education). These determinants are core economic and social rights identified by the United Nations Committee on Economic, Social and Cultural Rights.

The team began by analysing Vodafone’s tax record in Ghana, Kenya, Lesotho, Mozambique, Tanzania, and the Democratic Republic of Congo (DRC). Using an econometric model, they identified how many people in these countries accessed their core rights when their governments had an increase in revenue equal to the corporate tax paid by Vodafone. They found that, between 2007 and 2017, this funding permitted 858,000 children to attend school for an additional year than they otherwise would. It also allowed 966,188 people to access clean water and 1,371,972 to access basic sanitation. The resulting health benefits enabled an additional 54,275 children under five and 3,655 mothers to survive during this period.

The study quantifies the impact private-sector companies can have on SDG attainment, particularly in low- and middle-income countries. It also highlights the need for robust structures for reducing corporate tax avoidance. As lead author and NES Academic Fellow in General Practice Dr Eilish Hannah noted, her team’s findings demonstrate that “we can all contribute to SDG progress and human rights, both at home and overseas, by engaging with companies that pay fair and transparent taxes and encouraging other companies to do the same.” The study’s other St Andrews-based authors were Senior Lecturer Dr Bernadette O’Hare, Honorary Research Fellow Dr Marisol Lopez, and Research Assistant Mrs Rachel Etter-Phoya.

Read the University’s full press release on the study here and listen to Dr Hannah and Mrs Etter-Phoya discuss the study on the Tax Justice Network‘s ‘Taxcast’ here.

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