Defending Dignity A Manual for National Human Rights Institutions on Monitoring Economic, Social and Cultural Rights
11.4.4. Other tax issues with human rights implications
Other types of taxes relate to an individual’s or corporation’s assets. These include capital gains taxes,
property taxes, and other types of ‘wealth’ taxes. These taxes also have human rights implications.
For example, in countries where the ownership of property is heavily concentrated, property taxes
can be an efficient and simple mechanism for generating public revenues, as well as for correcting
gross inequalities in wealth distribution. Robust property taxation can also help to promote greater
gender equality through redistribution, given that traditionally the majority of property owners are men.
Nevertheless, the proportion of government revenue that comes from property taxes has not increased
in the majority of developing countries in recent decades; in many regions, landowning elites have a high
degree of political influence and so can influence fiscal policy decisions that would harm their interests.
The role of “tax havens” (or offshore banking in secrecy jurisdictions) is another issue related to
corporate tax and taxation of rich individuals. On a conservative estimate, tax revenue lost through
offshore banking totals some US$250 billion, more than three times the total development assistance of
all OECD countries. Tax havens corrupt national tax regimes, undermine financial regulation and deprive
governments of significant revenue that can be used to realize human rights and gender equality. The
facilitation of tax havens and offshore banking may also contravene the extraterritorial obligations of
States. In particular, the extraterritorial duty to protect means that governments should take action to
prevent tax-evading individuals and corporations from using their jurisdictions to evade tax liabilities
within the countries they operate.
HELPFUL TIP
The Maastricht Principles on Extraterritorial Obligations of States in the area
of Economic, Social and Cultural Rights interpret the obligation to provide
international cooperation and assistance. In particular, States must cooperate
with – and not undermine – efforts to mobilize the maximum of available
resources for the fulfilment of economic, social and cultural rights.
11.5. IN PRACTICE: EVALUATING TAX POLICY
As you did when analysing budget allocations, go back to your research matrix to refresh your memory
about the indicators you are interested in exploring and decide on a time period over which to compare
data. Some ideas for indicators and questions relevant to tax policy include:
• What is the tax-to-GDP ratio of your country?
• Is there a direct personal income tax? If so, are the rates higher for those with more income
(progressive) or is the tax rate scale relatively flat (regressive)?
• Does the personal income tax system benefit households with just one paid worker; does it allow
married women to file separately from their husband?
• Is the tax threshold (i.e. the level of income at which an individual or household starts paying
taxes) above the relative poverty line?
• What is the statutory corporate tax rate, and the effective rate (i.e. the rate which corporations in
fact end up paying taking into account tax incentives, tax avoidance etc.)?
• What rate is any consumption tax set at? Are basic staple items excluded from consumption tax?
Is the consumption tax the main source the State relies on to raise revenue?
116
Select target paragraph3
Connect to a paragraph
Connect to an entity
Disable highlights
Add to table of contents