The connection between civil and political rights and tax policy is so strong, that in a 2014 report on tax policy and human rights (“the report”), the UN Special Rapporteur on Extreme Poverty and Human Rights in 2014 said that the link runs both ways. That is, civil and political rights bear consequences for tax policy. But the formation of accountable states is closely tied to the emergence of taxation. And where tax abuse and unfair tax practices erode confidence in government the environment will be less prone to foster the right to take part in the conduct of public affairs.
A new publication by RightingFinance centers on the implications of civil and political rights for tax policy. The publication is the third in a series of advocacy tools on tax policy and human rights with the aim of assisting education and dissemination of the standards on tax policy and human rights contained in the above-mentioned report. Each of the advocacy tools addresses normative foundations of the rights in question, their applications to tax policy – including explanations and references to practical examples – and guiding questions for reflection.
The tax policy cycle, from design of budgets and tax codes, allocation of expenditure, through to monitoring and evaluation of impact are subject to rights to participation, accountability, transparency and access to information.
“Participation may involve creating space for citizens and civil society groups to participate directly in tax assessment processes or creating open forums for citizens to engage with local governments, tax authorities and national Members of Parliament around revenue and budgeting decisions,” the report said.
The report warned of the danger that, absent such institutional venues for engagement, elites that control the state have a free hand to capture it and direct its policies to their own benefit. According to a study by the Central American Institute for Fiscal Studies (ICEFI) “elites in Central America were able to shape fiscal policy to their advantage by three key mechanisms: maximizing profits through arguing stimulus to productive activities, economic growth and employment generation; socializing private costs by covering them with public debt or other fiscal policy distortions and aligning fiscal policy with their corporate interests of expansion, consolidation or migration to other sectors.”
RightingFinance’s publication addresses other issues in the report, such as the ramifications civil and political rights have for access to information on tax policy, natural resource taxation and tax incentives. On the latter, the report underscored how they are “often negotiated in secret between the Government and the company concerned,” with significant implications for the right to information, transparency and accountability. It also argued tax incentives are among the fiscal policies that should be subject to judicial oversight.
Among others, the publication invites reflection on questions such as how inclusive tax decision-making processes are regarding the poorest and vulnerable segments of the population. It also inquires on whether the public has access to sufficient data on revenues and expenditures to effectively participate in such processes, where they exist.
The upcoming (and last advocacy tool in this series) will address international cooperation for the achievement of human rights.