Glossary of Social & Economic Justice Terms
A National Constitution is a set of rules that guides how a country, and/or state, works. It is the supreme law of a country upon which all the other laws are founded. Section 2 (1) of the Constitution of Zimbabwe is clear that the “Constitution is the supreme law of Zimbabwe and any law, practice, custom or conduct inconsistent with it is invalid to the extent of the inconsistency, and (2) The obligations imposed by this Constitution are binding on every person, natural or juristic, including the State and all executive, legislative and judicial institutions and agencies of government at every level, and must be fulfilled by them. The constitution spells out the arms of government, what powers they have, and how they work. It also states the rights of citizens.
Social and Economic Rights are rights that provide for the protection, dignity, freedom and wellbeing of individuals by guaranteeing state supported entitlements to education, public healthcare, housing, decent working conditions among others. Such rights are found in the Zimbabwean Constitution’s Bill of Rights or Chapter 4. Examples are section 75 Right on state Supported Education, section 76 right on state supported Healthcare and section 77 the right to Water.
Justice refers to rightfulness or lawfulness. It focuses on justice of individual conduct or justice for individuals.
Social Justice entails that all people should have equal access to wealth, health, well-being, justice, privileges, and opportunity regardless of their legal, political, economic, or other circumstances.
Economy is the state of a country or region in terms of the production and consumption of goods and services and the supply of money
Economic justice is about creating a successful economy that achieves sustainable growth.
Livelihoods is a means of making a living. It encompasses people’s capabilities, assets, income and activities required to secure the necessities of life.
Budget is a yearly financial plan presenting the sources of money and spending for a financial year and is a way which governments provide for the basic necessities like health, education, roads, water and sanitation and social services.
A gender-responsive budget is a budget that works for everyone (women, men, girls, boys and including people with disabilities). It responds to the needs of different social groupings by ensuring gender-equitable distribution of resources and by contributing to equal opportunities for all.
Social contract is an implicit agreement among the members of a society to cooperate for social benefits.
Inequality a situation in which money or opportunities are not shared equally between different groups in society.
Pro-poor refers to policies that directly target poor people, or that are more generally aimed at reducing poverty.
Economic Growth is an increase in the capacity of an economy to produce goods and services over time.
Public Resource Management
Public resources refer to finances and assets that belong to the state. Prudent management of all public resources including revenues from different sources remains key to ensure realisation of social and economic rights.
Domestic resource mobilisation - the process through which countries raise and spend their own funds to provide for their people.
Natural resource governance - refers to “the norms, institutions and processes that determine how power and responsibilities over natural resources are exercised, how decisions are taken and how citizens – men, women, indigenous people and local communities – participate in and benefit from the management of natural resources.
Public Finance Management (PFM) refers to the set of laws, rules, systems and processes used by nations to mobilise revenue, allocate public funds, and undertake public spending account for funds and audit.
What governs PFM in Zimbabwe? Chapter 17 of the Constitution of Zimbabwe is clear in terms of public finance management. Section 298 lays the foundation and principles of good public finance management which are transparency, accountability, equity where the burden of taxation must be shared fairly while section 299 outlines parliamentary oversight role on state revenues and expenditures. Section 301 outlines allocation of revenues between provincial and local tiers of government. Other pieces of legislation are also in place to govern the management of public finances in Zimbabwe which are the Public Finance Management Act and the Reserve Bank Act.
Devolution is the transfer or delegation of governmental powers and responsibilities between the national government, provincial and metropolitan councils and local authorities which are expected to ensure good governance by being effective, transparent, accountable and responsive to the needs of local people.
Transparencymeans that government officials act openly, with citizens' knowledge of the decisions the officials are making on behalf of the public.
Accountability refers to answerability and liability over decisions and actions taken by public officials on public resources.
Social accountability refers to a form of accountability that emerges through actions by citizens and civil society organizations aimed at holding the State to account, as well as efforts by government and other actors such as the media, private sector and donors to support and respond to these actions.
Debt refers to money that is borrowed to serve a financial need.
Public debt refers to debt owed by public sector borrowers.
Publicly guaranteed Debt is debt originating from loans made to state- owned enterprises or private companies, the service of which has been guaranteed by the government of the debtor country.
Domestic Debt is debt owed to creditors resident in the same country as the debtor and denominated in local currency as opposed to external debt which is denominated in foreign currency and owed to foreign creditors.
External Debt is debt that is owed to foreign creditors and financial institutions.
Illegitimate debt is debt contracted in favour of a privileged minority while legitimate debt is debt contracted for the benefit of the majority.
Debt service is the total amount that a country spends (or is scheduled to spend) on its debt, consisting of interest payments and payments of the principal debt.
Debt justice the process of ensuring that borrowed money is expended in productive sectors that will be able to generate and raise revenue for the repayment of the debt.
What governs debt management in Zimbabwe? The national Constitution in sections 299, 300 and 305. The other pieces of legislation governing debt in Zimbabwe include the Public Debt Management Act, The Reserve Bank of Zimbabwe Act and the Public Finance Management Act.
Tax, Taxation & Tax Justice
Tax refers to a fee levied by government or a regulatory entity on a transaction, product or activity as a means of financing government expenditure.
Taxation is a process by government including policy decisions on what to tax, who to tax and how to tax and the expending of such revenues (collected from citizens, corporates and other sources). These include income tax, Value Added Tax (VAT), Pay as you Earn (PAYE).
Progressive Taxation is a system that places a larger tax burden on the rich than the poor, allowing them to spend a larger share of their incomes on basics, like food.
Tax justice refers to a tax system of a nation that is designed to ensure that in spite of social class, citizens pay a fair share of tax where revenue collected by the state in the form of taxes from corporations, working class and ordinary citizens is channelled toward the socio-economic development of the nation. For example, section 298 of the Zimbabwean Constitution states that “the burden of taxation must hared fairly and equally.”
Double Taxation occurs in cross border transactions involving two countries or jurisdictions in the same country, such that the same income or profit is subject to tax twice.
Double Taxation Agreement (DTAs) also commonly known as double taxation treaties are a form of bilateral economic agreement aimed at avoiding or eliminating the taxation of the same income and/or capital in the two contracting states.
Double non Taxation occurs when multinational corporations or individuals avoid paying tax on cross border transactions involving two countries/jurisdictions by taking advantage of the loopholes in the two domestic tax systems.
Permanent Establishment is commonly used in international taxation and refers to a fixed place of business through which the business of an enterprise is wholly or partly carried on. According to international law a business qualifies to be a permanent establishment after a certain period of time ranging from 6-12 months since its initial establishment. After such period the source country will assert its taxing powers over the business enterprise.
Resident Based Principle is a principle that allows a country to tax persons on the basis that they are residents or domiciled in the country, regardless of the source of income.
Round Tripping is a common system of tax evasion where an investor using the tax holiday advantage in Mauritius, Switzerland or other country with which Zimbabwe has a double taxation agreement to take money out of Zimbabwe only to bring it back disguised as foreign investment.
Secrecy Jurisdiction commonly referred to as Tax Havens are countries that levy low to no taxes at all with legislative, judicial, fiscal and regulatory provisions that encourage the relocation or movement of economic transactions to that domain whilst guaranteeing secrecy and concealing of the true identities of the investors.
Source Based Principle is a principle that gives taxing rights to the country where income is generated
Tax avoidance/tax planningrefers to the use of all available allowances, deductions, exclusions, exemptions, and loopholes in the tax system to minimize tax payable to the government.
Tax evasion is the illegal practice of not paying taxes, by not reporting income, reporting expenses not legally allowed, or by not paying taxes owed.
Treaty Shopping is the practice of structuring a multinational business to take advantage of more favourable tax treaties available in certain jurisdictions. A business that resides in a home country that doesn't have a tax treaty with the source country from which it receives income can establish an operation in a second source country that does have a favourable tax treaty in order to minimize its tax liability with the home country.