Femke Groothuis argues that tax reform is the best way to transform the apparel industry at the scale and pace required.
You've heard it before: The global environmental challenges we face are daunting and time sensitive. If we want to avoid catastrophic tipping points, we need to move quickly and ambitiously. If we want to achieve the Sustainable Development Goals (SDGs) we need to invest trillions of dollars. And so we scratch our heads and wonder if the actions we are currently taking are meaningful. We wonder if we must choose between economic development, job creation and the environment. And we cannot help but feel that even though our intentions are good, our actions amount to the equivalent of moving the deck chairs on a sinking ship. But what if there is a way to accelerate change at the pace we need, and create benefits for people and the planet? And what if the way to get there is by leveraging our tax system as a tool for transformative change?
Most people like to stay away from tax, either because it's unsexy, too complicated, or punitive. But tax policy is the fundamental way we steer our nations and fund our public services. So what can tax policy, and tax reform do for the apparel industry?
In this episode Michael talks with Femke Groothuis from the think tank Ex'tax about the potential power of tax reform to change the apparel industry. Femke explains both the theory and practice of green tax reform, and presents the results from recent case studies applying these principles in both high income countries in the European Union and Bangladesh. One of her key messages is that if countries use tax reform effectively, they will not have to choose between economic development and the environment. And this perspective has gained even more relevance since the Covid-19 induced economic crisis has put domestic revenues, jobs and sustainable growth at the top of the priority list worldwide.