Defending Dignity A Manual for National Human Rights Institutions on Monitoring Economic, Social and Cultural Rights 11.2. HUMAN RIGHTS NORMS IN TAX POLICY Tax policy has many goals. From a human rights perspective, the most central are to provide the resources for fulfilling ESCR, to fight inequality by redistributing economic gains fairly and to foster accountability between governments and their people. Tax policy should also: stimulate inclusive economic growth and encourage job creation and investment in the economy; be sustainable, without relying on donor funding; be efficient and cost-effective in how it raises revenue; and be characterized as enjoying integrity, with fair and enforced rules that are respected by all people. What are the priorities from a human rights perspective? Tax policy has serious implications for the enjoyment of a number of specific rights, as well as a direct impact on equality and nondiscrimination. It is also a key pillar of democratic accountability. Tax justice advocates refer to the “four Rs” of taxation. As outlined below, each is relevant to human rights: • Revenue mobilization is relevant for maximum available resources. Tax policy should mobilize sufficient revenue for a government to invest in realizing ESCR for all. • Redistribution is relevant for equality and non-discrimination. Tax policy should serve to redistribute gains fairly, without discriminatory effects on particular groups. Particular priority should be given to improving the situation of the most disadvantaged. • Representativeness is relevant for accountability, transparency and participation. The public should have access to easy-to-understand information about tax policy, tax revenues collected and tax shares paid by different groups and actors (e.g. different income groups; corporations). People, especially the most disadvantaged, should be involved in the tax policy process and it should take into account their expressed desires, needs and rights. • Re-pricing is relevant for regulating behaviour that is detrimental to human rights (e.g. penalties against pollution, transaction tax on high-frequency trading). This chapter focuses primarily on revenue mobilization and redistribution. 11.3. EVALUATING WHETHER THE TAX POLICY IS MAKING SUFFICIENT RESOURCES AVAILABLE Relevant indicators for determining whether the State’s fiscal policy is mobilizing the sufficient amount of resources to meet its human rights obligations are set out in the table below. 112 Indicator Potential data source Government revenue as a percentage of GDP World Bank World Development Indicators; OECD Tax revenue as a percentage of government revenue Finance ministry Tax effort (the ratio between the actual tax collection and taxable capacity) International Monetary Fund (IMF) Volume of illicit financial flows Global Financial Integrity Corporate tax revenue as percentage of total tax revenue Finance ministry