Part III Assessing resources 55% 50% France Germany Greece Spain Ireland 45% 40% 35% 0.0 0.0 20 20 20 20 20 20 20 20 20 19 19 19 19 08 2.0 07 1.0 06 4.0 05 2.0 04 6.0 03 3.0 02 8.0 01 4.0 00 10.0 99 5.0 98 12.0 97 6.0 96 14.0 Change in real GDP Tax effort Tax effort 12 11 20 20 10 09 20 08 20 07 20 06 20 05 20 04 20 03 20 02 20 01 20 20 00 99 20 19 7.0 95 Change in real GDP Source: International Monetary Fund, World Economic Outlook Database, 2011 30% 19 Government revenue as % of GDP These indicators should be compared to relevant benchmarks and over time. For example, review the two graphs below. The graph on the top shows government revenue as a percentage of GDP between 1999–2012. How does Ireland compare to other European countries? The graph on the bottom shows Guatemala’s GDP between 1995–2008 (in the orange columns) and its tax burden (the red dotted line) over the same period. How has Guatemala’s tax burden evolved in comparison to its GDP growth? Source: Own calculations based on statistics from the Ministry of Finance and the Central Bank of Guatemala As can be seen, Ireland collects less revenue as a proportion of GDP compared to other countries in Europe, while Guatemala’s tax burden has remained fairly stagnant, despite a significant growth in GDP, between 2003–2007 in particular. 11.4. EVALUATING WHETHER TAXES ARE RAISED EQUITABLY Is tax policy equitable in design and effect? And who benefits (i.e. how are these taxes effectively distributed across society)? To evaluate the questions, we need to ask: • What is the level and composition of taxes (e.g. income tax, value-added tax (VAT), trade taxes, property taxes)? • What is the share of tax paid by different groups and actors? What tax exemptions are granted? An exemption to direct taxes for individuals or households below a certain level of poverty may be an important part of protecting their ESCR, while tax exemptions or incentives granted to corporations may be problematic as they restrict revenue that can be spent on realizing rights. • Are there any gender biases in tax policy, explicitly or implicitly? For example, when a married woman’s income is attributed to her husband instead of her, or when taxes on goods and services do not provide exemptions on essential commodities for women (such as feminine hygiene products). • What institutional and distributive issues or constraints should be taken into account when determining tax policy? Chapter 11: Analysing resource mobilization | 113