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The Asia-Pacific region was a model for ‘growing with equity’ in the 1970s and 1980s. Rapid economic growth was achieved without major increases in inequality. However an economic take-off and market-oriented reforms in recent years, despite helping hundreds of millions to be lifted out of extreme poverty, has been accompanied by growing income and wealth gaps between rich and poor. This increase in inequality has greatly diminished the ability of economic growth to reduce poverty.
This report suggests a course for the region’s economies to be defined by inclusive growth and shared prosperity. It argues that tax policies can play an essential role in an effective pursuit of Sustainable Development Goal 10, which calls for reducing inequality. Taxes provide the main public revenue source for financing essential public programmes for inclusive development, such as healthcare, education, social protection and welfare schemes. And taxes can become a powerful policy tool for direct redistribution of income and wealth in a society.