A number of African countries and civil society organisations are pushing for inclusion of a text on human rights in the proposed treaty on global taxation, possibly forcing firms to adjust the way of conducting businesses.
Ongoing discussions for the United Nations Tax convention are due for the UN General Assembly this year.
But the talk of linking tax and human rights is eliciting debate with some seeing it as a cause-and-effect of bad governance.
The African lobbyists have strongly supported inclusion of human rights as a guiding principle within the UN Tax Convention, noting that 32 different UN instruments have this provision. They argue that just and progressive taxation is key to the realisation of human rights.
Negotiations for just taxation have been going on since September 2023, when developing countries began pushing for inclusion of the United Nations Framework Convention on International Tax Cooperation.
The platform at the UN is supposed to provide them with an opportunity to discuss global tax rules on an equal footing.
“The current international tax regime doesn’t include human rights as a principle. The reason we are collecting taxes is that we are collecting taxes from human beings to improve the lives of human beings,” said Prof Attiya Waris, a UN independent expert on foreign debt and human rights.
“That is not the focus that is there right now. Yet that is the central focus for lots of treaties that are developed there. And so, it is important that since that is the purpose of this organised UN Assembly that we focus on human rights.”
Those pushing this say human rights should be part of the conversation, because tax traditionally does not get discussed at the UN General Assembly.
Led by debt and human rights experts, most of the developing countries want the proposed platform to include a reference to human rights obligations in the terms of reference to the convention.
The tax rules would enable them to address issues such as tax avoidance, double taxation, tax evasion, and illicit financial flows.
The tax convention is significant because aggressive tax avoidance and tax evasion have a corrosive effect on public trust, financial integrity, the rule of law and sustainable development across the globe.
“If human rights are not included we will have the same position that we have now which is taxation collected with an eye on reducing taxes for corporations, and giving preferential rates but not really looking at the purpose for which taxes are collected,” Prof Waris explained.
Globally, entities within the UN have recognised that taxes are relevant to human rights.
While human rights would theoretically still be applicable to states, even if not referenced explicitly, this has not been happening in practice.
Prof Waris argues that if human rights is put in the preamble, it may not have a lot of weight.
“It must be visible as a principle and as an objective. The reason is that it is very important that African countries put human rights in that space because this actually gives them an exit clause for when they don’t realise that they will always be backfooting.”
Civil society organisations are also pushing the UN member states to prioritise tax-related illicit financial flows in the Convention negotiations and process.
Last week, while addressing member states at the second round of negotiations of the ToR for a UN Tax Convention in New York, Chenai Mukumba, Tax Justice Network Africa executive director, said that addressing tax-related illicit financial flows remains key to African countries and falls within the UN’s mandate through the SDG targets.
“Taxation means public health, education and even the political stability of whole nations. As we proceed towards the Second Session, we urge member states to keep this in mind as we take steps to reform the international tax system that will improve domestic resource mobilisation and public service delivery in our countries,” Ms Mukumba said.
The SDGs target 16.4 sets a global goal for significant reduction of illicit financial and arms flows, strengthening the recovery and return of stolen assets and combating all forms of organised crime by 2030.
She said that the UNGA Resolution 78/230 expressly mandates the UN Tax Convention Ad Hoc Committee to consider the adoption of measures against tax-related illicit financial flows and the taxation of income derived from the provision of cross-border services in an increasingly digitised and globalised economy.
“Taxation is not only a technical issue, but also a development and a human rights issue and that developing progressive tax systems is an urgent matter as has been evidenced by the recent citizen-led protests in Kenya, Ghana, Uganda and Nigeria,” she said.
The inclusion of human rights issues in the Tax Convention is part of the global conversation that supports calls for the overhaul of the international financial system, which is lopsided against the Global South.
