Taxation, public financial management, financial flows and equity

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Collect fairly, spend wisely - Government budgets can be powerful instruments for tackling inequalities, both through fair and equitable taxation and through strategic and efficient public spending. 

Policies for taxation and public spending are key factors for tackling inequalities within societies. 

Many countries have put in place progressive income taxes, corporate income taxes, as well as taxes on wealth, inheritance and consumption to help redistribute internal resources. Furthermore, the fight against tax avoidance, tax evasion and illicit financial flows can be seen as means to increase tax fairness and more equitable taxation.

International tax cooperation can complement effective national policies to support a fair, sustainable and modern tax system. If countries can keep more resources within the system, it means more money to spend on social policies and public service provision.

Smarter and more efficient expenditure policies and public financial management can also enhance equality. Good economic governance, transparency and accountability are crucial. Credible and well-managed budgets in line with national development priorities for SDG implementation can ensure the delivery of essential public goods and services, a strengthened infrastructure, reduced inequality, and promote macroeconomic stability. Open and competitive systems for government procurement, prudent debt management and sustainable public investment underpin efficient use of resources for poverty reduction.