Tax avoidance, tax evasion, tax fraud and profit shifting: report

Published:
4 August 2016
Issued by:
The Independent Expert on the promotion of a democratic and equitable international order
Presented:
To the GA at its 71th session
Link:

Background

The Independent Expert recognizes that a democratic and equitable international order cannot be achieved without adequate funding. A human rights-based approach to taxation and stricter measures against tax fraud, tax evasion and tax havens are urgently needed because a shortfall in tax revenues handicaps Governments in meeting human rights treaty obligations.

On 14 October 2016, the Independent Expert on the promotion of a democratic and equitable international order convened an Expert meeting to both identify ways to disseminate and follow up the recommendations contained in his 2016 report on taxation; and to collect inputs on the role of international financial institutions in the promotion of a world order that is democratic and equitable.

Summary

This report focuses on impacts of taxation on human rights and explores the challenges posed to the international order by widespread tax avoidance, tax evasion, tax fraud and profit shifting, facilitated by bank secrecy and a web of shell companies registered in tax havens.

The Independent Expert calls for resolute action by the international community, including through the creation of a United Nations tax cooperation body, the adoption of a United Nations tax convention, the phasing out of tax havens, the revision of the Guiding Principles on Business and Human Rights to include the obligation of corporations to pay their fair share of taxes and the adoption of a financial transactions tax.

The present report is an interim report on the adverse impacts of unfair fiscal and budgetary policies on the international order. The Independent Expert adds his voice to those of the various groups and organizations which have undertaken initiatives in this area and calls on Governments to take urgent action to correct the glaring injustices perpetuated by the systematic avoidance of taxes through tax havens that siphon off trillions of dollars from the economies of many countries, including developing countries.