The Problem of Tax Evasion and Its Impact on Education Funding

Tax evasion is a serious crime that deprives governments and citizens of public funds that are essential for supporting important social programs and services, such as health care, child care, and education. According to the Canada Revenue Agency (CRA), tax evasion and aggressive tax avoidance cost Canada billions of dollars every year1. This means that less money is available for investing in education and improving the quality of life for all Canadians.

Education is a fundamental right and a key factor for social and economic development. However, many countries around the world face challenges in providing adequate and equitable education for their children, especially in the context of the COVID-19 pandemic. According to UNESCO, the global education financing gap was estimated at $148 billion in 2020, and could increase by up to one-third due to the impact of the pandemic2. This gap threatens the achievement of the Sustainable Development Goal 4, which aims to ensure inclusive and quality education for all by 20302.

One of the main sources of education funding is taxation. However, tax evasion undermines the ability of governments to raise sufficient revenues to finance education and other public goods. Tax evaders use various methods to hide their income and assets from tax authorities, such as offshore accounts, shell companies, trusts, and complex schemes. Some of the most notorious examples of tax evasion are revealed by the Pandora Papers, the Panama Papers, and the Paradise Papers, which exposed the secret financial dealings of wealthy individuals and corporations around the world3.

The Solution: A New System to Combat Tax Evasion and Support Education

To address the problem of tax evasion and its impact on education funding, we propose a new system that would involve the following steps:

• Strengthening the legislation and enforcement to prevent and punish tax evasion, tax fraud, and other financial crimes. This would include closing loopholes, increasing penalties, enhancing cooperation with international partners, and investing in technology and human resources to detect and prosecute tax evaders1.
• Creating a global registry of beneficial owners of companies, trusts, foundations, and other legal entities. This would increase transparency and accountability in the financial system, and make it harder for tax evaders to hide behind anonymous structures.
• Establishing a global minimum corporate tax rate to prevent profit shifting and tax competition among countries. This would ensure that multinational corporations pay their fair share of taxes wherever they operate, and reduce the incentives for tax evasion.
• Allocating a portion of the recovered tax revenues to a dedicated fund for education. This would provide additional resources for improving access, quality, equity, and inclusion in education at all levels, especially for the most marginalized and vulnerable groups.

The Benefits: A More Fair and Sustainable Future for All

By implementing this new system, we can achieve the following benefits:

• A more fair and efficient tax system that ensures that everyone pays their fair share of taxes according to their ability to pay.
• A more robust and resilient public sector that can provide essential services and support social welfare for all citizens.
• A more inclusive and quality education that empowers children and youth with the knowledge, skills, values, and attitudes they need to thrive in the 21st century.
• A more sustainable and peaceful future that fosters social justice, human rights, democracy, and global citizenship.

We believe that this new system is not only feasible but also necessary to combat tax evasion and support education. We invite you to join us in advocating for this system and making it a reality. Together, we can create a better world for ourselves and our children.