INTERNATIONAL BAR ASSOCIATION HUMAN RIGHTS INSTITUTE [For immediate
release: Tuesday, 08 October 2013]
Facilitating tax abuses could constitute violation of international
human rights concludes IBAHRI
Task Force Report
Update: see our new Tax Abuse and Human Rights page.
A new International Bar Association’s Human Rights Institute (IBAHRI)
Task Force report, finds that actions of states that encourage or
facilitate tax abuses, or that deliberately frustrate the efforts of
other states to counter tax
abuses, could constitute a violation of their international human rights
obligations, particularly with respect to economic, social and cultural
rights (ESCR).The report, entitled, Tax Abuses, Poverty and Human Rights, was
released today during the 2013 International Bar Association (IBA)
Annual Conference, taking place in Boston, USA.
Prepared by the IBAHRI
Task Force on Illicit Financial
Flows, Poverty and Human Rights, the Report asserts that tax abuses
(that is tax practises contrary to the letter or spirit of international
and domestic tax laws and policies) have a significant negative impact
on the realisation of human rights in developing
countries. Profits flowing out of developing countries deprive
governments of the resources to alleviate poverty and uphold
international human rights standards, in particular ESCR.
Drawing on case
studies from Brazil, Jersey and the SADC (Southern African Development
Community) Region, Tax Abuses, Poverty and Human Rights addresses
pertinent questions relating to where to draw the line between
legitimate tax avoidance and immoral tax practises. The report
highlights concern over the ‘morality’
of sophisticated tax planning strategies, whereby corporations and
wealthy individuals end up paying little or no tax.
Categories of tax
behaviour repeatedly emphasised by stakeholders as potentially abusive
include: transfer pricing and other cross-border
intra-group transactions; the negotiation of tax holidays and
incentives; the taxation of natural resources and the use of offshore
Thomas Pogge, Leitner Professor of Philosophy and International
Affairs at Yale University, USA and Task Force Chair
fact that sophisticated tax planning strategies are technically legal
is no longer a justification for their use. The impact of tax abuses,
facilitated by secrecy
jurisdictions, on global poverty is tremendous. The international
community has not only a legal obligation but also a moral duty to
ensure that states use the maximum resources available to fulfil the
civil, political, economic and social rights of citizens.
Report, based on extensive consultation over an 18-month period,
highlights tax abuses as a pressing human rights issue and delivers
recommendations for states, businesses and the legal profession. The
- States to implement international standards of transparency and information exchange in tax matters effectively
to undertake due diligence measures and impact assessment of all
operations, including with respect to tax planning strategies; and
to balance their obligations to defend clients’ interest with the
responsibilities to uphold human rights in their practice, including
with respect to tax planning strategies.
specifically on the role of lawyers to counter tax abuses, Sternford
Moyo, IBAHRI Co-Chair and Task Force Member commented:
profession has an important role to play in confronting the negative
effects of tax abuses on human rights. Lawyers have a duty to balance
their obligation to their client’s interests with their obligations to
uphold human rights and the rule of law.
to download the new report Tax abuses, Poverty and Human Rights
Update: for the Tax Justice Focus Human Rights edition, see here.