Tax justice—a crucial tool to advance human rights

by Magdalena Sepúlveda on 10th December 2021

On Human Rights Day, the world looks a lot different through a lens of social and economic rights.

One of the lucky ones—only 7 per cent of Africans are vaccinated against the coronavirus

Much has been said about the ‘post-pandemic world’—the one that was to rise from the ashes, hopefully less materialistic and more sustainable, more supportive and even pro-feminist. But a new wave of infections and the emergence of variants seem to be pushing this era back once again and we are entering the third year of the global health crisis.

As the world marks International Human Rights Day, hypocrisy and cynicism remain the order of the day—particularly on the part of rich countries, which pay lip-service to basic human rights while contributing to their denial to most of the planet’s population.

Vaccines hoarded

Covid-19 is the best example. Despite their promises, most states in the global north have monopolised and hoarded vaccines. These days, they are turning a deaf ear while a hundred or so emerging countries, led by South Africa and India, demand the lifting of patents on vaccines and treatments against the virus.

Intellectual property rights are not the only reason barely 7 per cent of Africans are fully vaccinated but they are certainly a major obstacle. This selfishness over access to vaccines is not only morally outrageous—it is already coming back like a boomerang to hit rich countries, as new variants emerge.



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The other lamentable image of this end of 2021 is the accumulation of tragedies facing people on the move at the gates of Poland, in the Mediterranean, in the English Channel and at the border between Mexico and the United States. Here again, the leaders of the rich states pretend to forget that, while economic recovery is evident in their own countries, it is still to come in the developing world, which has suffered an explosion of poverty since the start of the pandemic, forcing hundreds of thousands into exile.

An estimated 97 million more people are living on less than US$1.90 a day as a result of the pandemic and another 163 million on less than US$5.50 a day. Three to four years of progress towards eradicating extreme poverty have been utterly lost.

Haemorrhage of resources

Far from the headlines, a recent news item highlights the double talk of the major powers—the reform of the taxation of multinationals. After two years of negotiations, an agreement was adopted at the beginning of October, with the introduction of a global tax on corporate profits its key measure. The aim? To put an end to the devastating competition among states on corporate taxation, which is causing a haemorrhage of resources at the expense of funding for rights such as access to water, health, education or vaccines.

At least $483 billion in tax revenue is lost each year to tax abuse by multinationals and wealthy individuals. This would be enough to cover more than three times the cost of a full Covid-19 vaccine regimen for the entire global population.

The world will continue to be deprived of these funds. The negotiations led by the Organisation for Economic Co-operation and Development, without really listening to developing countries, have only resulted in the introduction of a 15 per cent tax on multinationals. This will generate just $150 billion in additional tax revenue, which will, moreover, go primarily to rich countries.



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An additional $250 billion could have been raised with a 21 per cent rate and $500 billion with a 25 per cent rate, as advocated by the Independent Commission for the Reform of International Corporate Taxation, of which I am a member, along with such figures as Joseph Stiglitz, Thomas Piketty, Jayati Ghosh and José Antonio Ocampo.

The leaders of rich countries are concerned about the extent of tax evasion but remain convinced that the best way to serve their national interest is to submit to the injunctions of multinationals and the demands of secrecy jurisdictions. Most of the latter are not small islands lined with coconut palms: OECD countries are responsible for 78 per cent of the annual tax losses worldwide to multinationals and the richest. The most hypocritical country is the United Kingdom, which, with its network of overseas territories and ‘crown dependencies’, is responsible for 39 per cent of global losses.

Direct attack

Tax avoidance and evasion by most multinationals and the richest—and its tolerance—deprives states of additional resources, representing a direct attack on human rights. Without these funds, it is impossible to restore the health services which have fought heroically against the virus—thousands of doctors and nurses have lost their lives—with meagre resources constantly under attack from austerity programmes. It is also impossible to give a future to all the children out of school during and due to the pandemic: 99 per cent of children in Latin America were out of school for a year, an estimated 3.1 million forever.

Without additional funds, it is also impossible to finance infrastructure or provide access to water or sanitation or to daycare and nursing homes—all of which continues to increase the workload of women, prime victims of the pandemic. Finally, it is impossible to deal with the climate emergency, while the increase in natural disasters deprives entire populations of shelter and food.

It is painful that the rulers of the rich countries have once again failed to address the magnitude of the crises we are going through. But a better world is possible, thanks to a growing movement of people around the world who are challenging governments to make multinationals and the super-rich pay their fair share.

Each country can, if it wishes, unilaterally adopt a much more ambitious tax rate for multinationals, starting with the Europeans. The ripple effect on the others will be inescapable.

Tax justice is not a technical dispute. It is a crucial tool for advancing human rights.

Magdalena Sepúlveda

Magdalena Sepúlveda is executive director of the Global Initiative for Economic, Social and Cultural Rights and a member of the Independent Commission on International Corporate Tax Reform (ICRICT). From 2008 to 2014 she was United Nations rapporteur on extreme poverty and human rights.

https://socialeurope.eu/tax-justice-a-crucial-tool-to-advance-human-rights#:~:text=Direct%20attack,direct%20attack%20on%20human%20rights.&text=Tax%20justice%20is%20not%20a,tool%20for%20advancing%20human%20rights.

Also published by:

ICRICTMagdalena Sepulveda, Magdalena Sepúlveda