How Irish, Swiss and Dutch tax policy harms children abroad | Seen
Today is World Children’s Day and the 32nd anniversary of the adoption of the United Nations Convention on the Rights of the Child.
Despite the devastating impact of the COVID-19 pandemic on children around the world, the general well-being of children – especially girls – has improved dramatically over the past 32 years.
But we risk backing off if we do not tackle head-on the thorny issue of tax evasion by high net worth individuals and businesses, enabled by weak corporate tax laws and financial transparency in specific circumstances. States like Ireland, Switzerland and the Netherlands.
Tax evasion is fundamentally a matter of children’s rights. Indeed, children, more than any other group of rights holders, depend on sufficient government tax revenues for the realization of their basic rights.
How does tax avoidance hurt children?
Human rights violations against children are relatively rarely motivated by animosity or prejudice. They are most often motivated by a lack of government resources.
In countries of the South, governments lack the funds necessary to fully protect children due to insufficient tax revenues.
Tax revenues are lacking in large part because taxable wealth has been diverted to tax havens. It is estimated that 10 percent of global GDP and 30 percent of the wealth of the African continent is hidden in tax havens.
Imagine what the world would be like for children if even a fraction of this wealth could be taxed by the governments of the countries where it was generated.
Even a small percentage increase in tax revenue can have a huge effect on children’s rights, as incremental improvements – like an extra year of schooling for girls – have huge positive ripple effects.
Fewer parents would have to choose which children to send to school and which to keep at home for work. Fewer families would suffer the grief of losing a baby or toddler to a preventable disease.
Fewer preteen girls are expected to live in fear of being married as children. Fewer teens are expected to take life-threatening trips to find work or escape violence.
States with weak fiscal and financial transparency laws profit from hiding money that would have been spent on schools, clinics, roads, law enforcement, housing, electricity, High speed internet and community development.
In other words, states with weak fiscal and financial transparency laws externalize the costs of their decisions to âother people’s childrenâ – often children an ocean of distance away from the citizens of those states. neither see nor hear.
A potential solution
In 2020, the United Nations Committee on the Rights of the Child (CRC) set an important precedent by asking Ireland to describe the steps taken to â[e]Ensure that tax policies do not contribute to tax abuse of companies operating in other countries, which would have a negative impact on the availability of resources for the realization of children’s rights in those countries â.
The United Nations Committee on the Elimination of All Forms of Discrimination Against Women (CEDAW) also set a bold precedent when it called on Switzerland to make public its periodic, independent, impartial and participatory assessments. the extraterritorial effects of its corporate tax and financial secrecy policies on women’s rights.
The request follows a devastating report by a coalition of activists documenting the ways in which Swiss politics undermine women’s rights abroad.
The Netherlands, like Ireland and Switzerland, score very badly on the tax haven and financial secrecy indices. Its review by the Committee on the Rights of the Child is scheduled for February 2022.
This upcoming review presents a valuable opportunity for the CRC to lobby the Netherlands to publicly report on the extraterritorial effects of its fiscal and financial transparency policies.
It also offers the possibility of creating a chain of precedents whereby all states that play a significant role in facilitating international tax evasion can expect to be called upon to publicly account for the effects of their decisions on children to abroad.
If the small minority of states that are the worst offenders in this regard are regularly held publicly accountable for the costs of their human rights decisions, policymakers and citizens will be better able to hold them accountable.
Sunlight is the best disinfectant, as United States Supreme Court Justice Louis Brandeis noted. The most damning information about tax havens only emerged as a result of data leaks, such as the ones behind the Panama, Paradise and Pandora Papers scandals.
Financial secrecy makes it almost impossible for policy makers and citizens to appreciate the real impact of their decisions in the world.
On the other hand, if citizens of Ireland, Switzerland, the Netherlands and similar states could see the real costs of their fiscal and financial transparency policies on children’s human rights abroad, they would demand reforms. .
_Alexandra Dufresne teaches law at Swiss higher education institutions and runs a human rights clinic serving NGOs in the United States, Switzerland, Europe and Africa. _