The world is wasting billions of pounds of unused tax revenue in countries where there are no jobs, there is no development, and there is not a single human development, according to a study by a think tank.
The report, titled Unclaimed money, poverty, and democracy: Unclaimed cash, poverty and democracy, warns that this is a problem because the world’s governments have not kept their promise of reducing inequality, the study said.
The authors suggest that a new global approach to dealing with unclaimed tax money could be to increase tax revenues for those countries where the governments have been inefficient, but also to spend them on development, infrastructure, education and social services, and to help the countries where they have not been effective.
The world has wasted billions of British pounds (€1.65 billion) on unearned wealth in poor countries, but is not spending it in the same way as the richer countries, the report said.
“We know that many of the countries that are in the most poverty stricken regions have some of the poorest people,” said Peter Walker, co-author of the report and director of the Centre for Global Development think tank in London.
“There is a disconnect between the rich countries’ approach to poverty and their poor neighbours’ approach,” he said.
Walker said that when developing countries are not helping their own people the world needs to change its approach.
“The problem of unearned tax revenue is that the rich people don’t have much money to spend,” he added.
“It’s the poor people that need to change their behaviour.”