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India received the highest number of regressive tax recommendations from the IMF between 2022 and 2024, according to an Oxfam report analysing guidance given to 125 countries. The study found that a majority of tax advice for low- and middle-income nations placed a heavier burden on lower-income groups, while high-income countries received more progressive recommendations. South Asia recorded the highest share of such guidance. The report also noted limited focus on wealth taxes despite rising global inequality. Oxfam has called for more progressive tax policies, urging greater emphasis on taxing high-income individuals and reducing reliance on consumption-based taxes in developing economies.
India received the highest number of regressive tax recommendations from the International Monetary Fund (IMF) between 2022 and 2024, according to an analysis by Oxfam released ahead of the IMF and World Bank spring meetings in Washington. Advertisement
The study reviewed 1,049 tax-related recommendations made by the IMF to 125 countries during the period. It found that 59 per cent of the advice given to low- and lower-middle-income countries was regressive, while 52 per cent of recommendations for high-income countries were progressive.
A regressive tax system places a greater burden on lower-income groups, while progressive taxation ensures higher earners contribute a larger share relative to their income.
Oxfam highlighted that India topped the list of countries receiving regressive tax suggestions, followed by several nations in the Global South. The report noted that such measures could increase financial pressure on middle- and low-income populations, while leaving higher-income groups less affected.
The analysis also pointed out that South Asia received the most regressive tax guidance overall, followed by Latin America, the Caribbean, and sub-Saharan Africa.
In contrast, countries such as the United States and Brazil received the highest number of progressive recommendations. Other nations including Canada, Australia, France, the United Kingdom, and Sweden also saw more progressive tax advice.
The report observed that only around 3 per cent of IMF recommendations focused on taxing wealth, including net wealth and capital gains, despite a reported 81 per cent increase in billionaire wealth globally since 2020.
Several country-specific examples were cited. In Chile, the IMF recommended increasing taxes on low- and middle-income groups without changes to top tax brackets. In Nigeria, it suggested raising value-added tax, while in Hungary, it advised against implementing a windfall tax on energy companies.
The report also noted recommendations in developed economies, such as lowering corporate tax in New Zealand and reducing taxes on deferred capital gains in Sweden to address housing market concerns.
Oxfam further found that the IMF linked tax policy to inequality in 34 per cent of cases for high-income countries, compared to just 8 per cent for low- and lower-middle-income nations. Nearly 90 per cent of these countries already face moderate to high levels of inequality.
The organisation has called for greater focus on progressive taxation, including increased attention to wealth taxes and measures targeting high-net-worth individuals. It also urged the IMF to assess the distributional impact of its policy advice and reduce reliance on consumption-based taxes that can disproportionately affect lower-income households.
The findings have brought attention to differences in fiscal policy recommendations across regions, particularly in emerging and developing economies.
Source: PTI
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