{"id":82929,"date":"2024-10-08T18:23:15","date_gmt":"2024-10-08T23:23:15","guid":{"rendered":"https:\/\/www.dejusticia.org\/?p=82929"},"modified":"2024-10-09T10:59:22","modified_gmt":"2024-10-09T15:59:22","slug":"a-human-rights-based-approach-to-tax-systems","status":"publish","type":"post","link":"https:\/\/develop.dejusticia.org\/en\/a-human-rights-based-approach-to-tax-systems\/","title":{"rendered":"A human rights-based approach to tax systems"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">Tax systems are very important to<\/span><a href=\"https:\/\/www.sciencedirect.com\/science\/article\/pii\/S2666660X23000373\"> <span style=\"font-weight: 400;\">help the economy recover and to enable the government to better manage its money<\/span><\/a><span style=\"font-weight: 400;\">. However, they have often lacked a human rights perspective, which is essential to guide their implementation towards redistribution of wealth and reduction of inequalities.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">In recent years, initiatives to reform tax systems using a human rights-based approach have emerged at the<\/span><a href=\"https:\/\/derechosypoliticafiscal.org\/es\/\"> <span style=\"font-weight: 400;\">national<\/span><\/a><span style=\"font-weight: 400;\">,<\/span><a href=\"https:\/\/www.cepal.org\/es\/ptlac\"> <span style=\"font-weight: 400;\">regional<\/span><\/a><span style=\"font-weight: 400;\"> and<\/span><a href=\"https:\/\/documents.un.org\/doc\/undoc\/ltd\/n23\/300\/69\/pdf\/n2330069.pdf?OpenElement\"> <span style=\"font-weight: 400;\">international<\/span><\/a><span style=\"font-weight: 400;\"> levels. These initiatives seek to make tax systems more progressive, transparent and fair, with the aim of combating inequality, tackling climate change, financing public services equitably and fostering inclusive economic growth. This includes measures to prevent abuses such as the use of tax havens to evade taxes and the application of indirect taxes that disproportionately affect the most vulnerable.<\/span><\/p>\n<p><span style=\"font-weight: 400; color: #000000;\">Integrating human rights into tax policy is not only a matter of justice, but also an effective strategy for achieving sustainable and equitable development. By adopting a human rights-based approach, tax systems can promote the well-being of the entire population.<\/span><\/p>\n<h2><span style=\"color: #000000;\"><b>Tax errors: ignoring human rights<\/b><\/span><\/h2>\n<p><span style=\"color: #000000;\"><span style=\"font-weight: 400;\"> The structure of many global tax systems perpetuates inequalities, ignoring the principles of equity and social justice. The<a href=\"https:\/\/www.acnur.org\/fileadmin\/Documentos\/BDL\/2012\/8785.pdf\"> United Nations<\/a> (UN) and<a href=\"https:\/\/www.oas.org\/es\/cidh\/informes\/pdfs\/PoliticasPublicasDDHH.pdf\"> the Inter-American Commission on Human Rights<\/a> (IACHR) have stressed that States must mobilize resources through equitable and progressive tax systems to ensure human rights.<a href=\"https:\/\/documents.un.org\/doc\/undoc\/gen\/g14\/033\/77\/pdf\/g1403377.pdf\"> Special Rapporteurs on extreme poverty<\/a> have also insisted on designing public policies,<a href=\"https:\/\/www.ohchr.org\/es\/special-procedures\/sr-poverty\/country-visits\"> including tax policies<\/a>, with a human rights approach.<\/span><\/span><\/p>\n<p><span style=\"color: #000000;\"><span style=\"font-weight: 400;\">Despite the global relevance of these discussions, policymakers have tended to ignore them, which has led to three main problems that, although some of the most common, do not cover all the current challenges in terms of tax fairness and equity in the world:<\/span><span style=\"font-weight: 400;\">\u00a0<\/span><\/span><\/p>\n<ol>\n<li><span style=\"color: #000000;\"><b>Tax regressivity: <\/b><span style=\"font-weight: 400;\">This occurs when people with lower incomes end up paying more of their money in taxes compared to those who earn more. A common example of this is the value-added tax (VAT), which is applied uniformly to the consumption of goods and services, regardless of whether the person is rich or poor. <\/span><a href=\"https:\/\/www.oecd.org\/content\/dam\/oecd\/en\/topics\/policy-sub-issues\/global-tax-revenues\/estadisticas-tributarias-america-latina-caribe-colombia.pdf\"><span style=\"font-weight: 400;\">The Organisation for Economic Co-operation and Development<\/span><\/a><span style=\"font-weight: 400;\">\u00a0(OECD) notes that many countries, such as in Latin America and the Caribbean, rely on VAT. In this region, VAT represents 28% of tax revenues, compared to 21% in the OECD. In Colombia, VAT is 32%, which has intensified economic inequalities in the country.\u00a0<\/span>Regressivity has also been evidenced in wealth taxation.<a href=\"https:\/\/www.taxobservatory.eu\/publication\/a-blueprint-for-a-coordinated-minimum-effective-taxation-standard-for-ultra-high-net-worth-individuals\/\"><span style=\"font-weight: 400;\">Gabriel Zucman<\/span><\/a>\u00a0revealed that the super-rich in some European countries pay between 0% and 0.6% of their wealth in capital taxes. This also occurs in Latin America, particularly in Colombia, although tax rates increase with income, the wealthy enjoy deductions and exemptions, which reduces their tax burden.<a href=\"https:\/\/www.dian.gov.co\/dian\/Documents\/Informe-Comite-Expertos-DIAN-OCDE2021.pdf\"><span style=\"font-weight: 400;\">The richest 1% in Colombia pay only 2% of their income in taxes, compared to 4% for the least wealthy<\/span><\/a><a style=\"color: #000000;\" href=\"https:\/\/www.dian.gov.co\/dian\/Documents\/Informe-Comite-Expertos-DIAN-OCDE2021.pdf\"><span style=\"font-weight: 400;\">.<\/span><\/a><\/span><\/li>\n<li><span style=\"color: #000000;\"><b>Tax evasion and avoidance<\/b>: Tax evasion occurs when someone hides their income to avoid paying taxes, often by transferring money to tax havens, where taxes can be as low as 0%. Avoidance, on the other hand, uses tricks and loopholes to pay less tax legally. Both evasion and avoidance are common practices among high-income individuals and businesses seeking to reduce what they owe in taxes. According to the <a href=\"https:\/\/taxjustice.net\/reports\/the-state-of-tax-justice-2023\/\"><span style=\"font-weight: 400;\">Tax Justice Network<\/span><\/a><a style=\"color: #000000;\" href=\"https:\/\/taxjustice.net\/reports\/the-state-of-tax-justice-2023\/\"><span style=\"font-weight: 400;\">,<\/span><\/a>\u00a0global tax evasion causes annual losses of US$480 billion. In Colombia, these losses totaled nearly US$1.9 billion (0.6% of GDP), equivalent to the investment expenditure of the Ministry of Education in 2023.<\/span><\/li>\n<li><span style=\"color: #000000;\"><span style=\"color: #000000;\"><b>Downward tax competition: <\/b>When countries reduce their tax rates or create special tax incentives to attract investment and businesses, they do so with the intention of boosting their economy. However, these policies can have negative consequences. On the one hand, government revenues decrease, and on the other, &#8220;tax spillovers&#8221; are generated. This happens when countries, <\/span><\/span><a href=\"https:\/\/taxjustice.net\/reports\/the-state-of-tax-justice-2023\/\">in trying to capture subsidiaries of large multinationals, end up facing greater losses<\/a> because these companies often avoid paying their fair share of taxes. Moreover, in some cases,<a href=\"https:\/\/www.sciencedirect.com\/science\/article\/abs\/pii\/S0301479720316145\"> these companies do not offer the best human rights guarantees<\/a>.<\/li>\n<\/ol>\n<p><span style=\"font-weight: 400; color: #000000;\">These problems undermine equity, limit tax collection and restrict social investments, perpetuating socioeconomic inequalities.<\/span><\/p>\n<h2><span style=\"color: #000000;\"><b>Challenges for global tax change<\/b><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Although there has long been a mutual ignorance between fiscal issues and human rights, recent academic and doctrinal advances have begun to bridge this gap. The<\/span><a href=\"https:\/\/www.oas.org\/es\/cidh\/informes\/pdfs\/PoliticasPublicasDDHH.pdf\"> <span style=\"font-weight: 400;\">IACHR has emphasized<\/span><\/a><span style=\"font-weight: 400;\"> that the guarantee of human rights must guide fiscal policy. Likewise, the<\/span><a href=\"https:\/\/documents.un.org\/doc\/undoc\/gen\/g14\/033\/77\/pdf\/g1403377.pdf\"> <span style=\"font-weight: 400;\">2014<\/span><\/a><span style=\"font-weight: 400;\"> and<\/span><a href=\"https:\/\/www.ohchr.org\/es\/special-procedures\/sr-poverty\/country-visits\"> <span style=\"font-weight: 400;\">2020<\/span><\/a><span style=\"font-weight: 400;\"> reports of the UN Special Rapporteurs on extreme poverty and human rights have underscored that fiscal policies are fundamental to the realization of human rights, especially economic, social and cultural rights. These reports highlight the need for States to effectively use available resources to meet minimum essential levels of these rights.<\/span><\/p>\n<p><span style=\"color: #000000;\"><span style=\"font-weight: 400;\">Similarly, <\/span><a href=\"https:\/\/www.ohchr.org\/es\/documents\/general-comments-and-recommendations\/general-comment-no-19-2016-public-budgeting\"><span style=\"font-weight: 400;\">General Comment No. 19 of the UN Committee on the Rights of the Child<\/span><\/a><span style=\"font-weight: 400;\">\u00a0provides guidelines for public budgeting to guarantee children&#8217;s rights. It establishes principles of effectiveness, efficiency, equity and transparency, which are also applicable to fiscal policy in general. These principles underline the need to mobilize resources effectively and equitably, ensuring transparency and participation in financial management.<\/span><\/span><\/p>\n<p><span style=\"color: #000000;\"><span style=\"font-weight: 400;\">Against this backdrop, the challenge for tax policy is to align with human rights principles. These principles include progressivity and non-regressivity, equity, promotion of equality and non-discrimination, transparency and accountability, and international cooperation. <\/span><a href=\"https:\/\/derechosypoliticafiscal.org\/es\/\"><span style=\"font-weight: 400;\">Principles<\/span><\/a><span style=\"font-weight: 400;\"> that seek to ensure that fiscal policies, especially tax measures, are fair and equitable, and that they support the realization of human rights.<\/span><\/span><\/p>\n<p><span style=\"color: #000000;\"><span style=\"font-weight: 400;\">A key principle for implementing tax measures that respect human rights is international cooperation on tax matters. This is based on the <\/span><a href=\"https:\/\/www.ciel.org\/Publications\/Maastricht_Nov2012.pdf\"><span style=\"font-weight: 400;\">responsibility of countries to respect and protect human rights<\/span><\/a><span style=\"font-weight: 400;\">, even beyond their borders. In practice, it means that countries must work together to address global tax problems such as tax evasion and illicit financial flows. This collaboration is essential to prevent the narrowing of tax bases and to ensure that large taxpayers fulfill their tax obligations. To achieve this, international agreements are needed that include measures such as taxes on large fortunes, the elimination of tax havens and the exchange of tax information between nations.<\/span><\/span><\/p>\n<p><span style=\"font-weight: 400;\">It is important to note that, although there are initiatives such as the OECD&#8217;s<\/span><a href=\"https:\/\/journals.sagepub.com\/doi\/abs\/10.1177\/0193841X221103338\"> <span style=\"font-weight: 400;\">Base Erosion and Profit Shifting<\/span><\/a><span style=\"font-weight: 400;\"> (BEPS), designed to address downward tax competition and tax havens, they have faced several problems. Among these challenges are the uneven impact on developing countries, the complexity of the rules and<\/span><a href=\"https:\/\/www.taxobservatory.eu\/publication\/global-tax-evasion-report-2024\/\"> <span style=\"font-weight: 400;\">the political resistance of some countries<\/span><\/a><span style=\"font-weight: 400;\"> to adopt the proposed measures. To move forward, it is crucial to develop new tax cooperation mechanisms that ensure fair participation and strong commitment from all countries. A suitable forum for this collaboration could be the United Nations, which offers a broader representation of nations.<\/span><\/p>\n<h2><span style=\"color: #000000;\"><b>Integrating human rights into global taxation: new directions<\/b><\/span><\/h2>\n<p><span style=\"font-weight: 400; color: #000000;\">The integration of human rights into tax policy is necessary to build tax systems that promote social justice, and ensure that all people, regardless of their origin, gender, race, religion, sexual orientation or socioeconomic status, have access to the same opportunities and can live in dignity.<\/span><\/p>\n<p><span style=\"font-weight: 400; color: #000000;\">International cooperation plays a crucial role in this process, as it allows States to address global tax problems such as tax evasion and illicit financial flows jointly. To achieve this, it is necessary to implement and support regional and global agreements that seek to create concrete measures, with a level playing field between countries.<\/span><\/p>\n<p><span style=\"font-weight: 400; color: #000000;\">By aligning tax policy with human rights principles and fostering international cooperation, we can build a fairer and more sustainable tax system that contributes to an equitable distribution of resources, combats structural inequalities and supports the full realization of human rights for all.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Reforming tax systems with a focus on human rights is key to combating inequality, financing public services and promoting inclusive growth. International cooperation is necessary to confront tax evasion, reduce unfair dependencies and promote a more equitable redistribution of wealth.<\/p>\n","protected":false},"author":1,"featured_media":82943,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[4491],"tags":[5338,6155,1810,6154,6338],"class_list":["post-82929","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-home_internacional-en","tag-equity","tag-fiscal-justice","tag-human-rights-en-3","tag-tax-cooperation","tag-tax-justice","subcategory-blog-post","subcategory-highlight","subcategory-home_internacional-en","medium-dejusticia-en","post-scope-aaa-not-blog","post-scope-international-en"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v25.9 (Yoast SEO v25.9) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>A human rights-based 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